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DSN Hosts Global 100 Celebration Event

July 5, 2012 by DSN Staff Leave a Comment

DSN

Direct Selling News, the leading trade publication for the direct selling industry, announced the 2011 DSN Global 100, the magazine’s annual ranking of the top revenue-generating direct selling companies in the world. The final list was published in the June issue of Direct Selling News.

The Top 10 companies, which generated more than $42 billion in net sales for 2011, were: Avon (1), Amway (2), Herbalife (3), Natura (4), Vorwerk (5), Mary Kay (6), Tupperware (7), Oriflame (8), Nu Skin (9) and Belcorp (10).

Sixteen countries were represented in the Global 100 ranking—Brazil, Canada, China, Germany, India, Japan, Malaysia, New Zealand, Peru, Russia, South Korea, Sweden, Switzerland, Thailand, United Kingdom and the United States. In all, the DSN Global 100 companies achieved over $63 billion in net sales in 2011 through more than 40 million sales consultants. 

The Global 100 Celebration, held at the Hyatt Regency in Dallas, was sponsored by Jenkon, InfoTrax and Video Plus. More than 500 executives from direct selling companies attended, including Avon Group Vice President Tom Kelly, Amway Regional President Asia-Pacific Jim Payne, Oriflame CEO Magnus Brannstrom, Primerica Co-CEOs John Addison and Rick Williams, USANA CEO Dave Wentz, PartyLite Worldwide President Robert Goergen Jr., ACN President Greg Provenzano, Scentsy Founders Orville and Heidi Thompson and ViSalus Founders Ryan Blair, Nick Sarnicola and Blake Mallen, as well as many others.

Keynote speaker for the event was Doug DeVos, President of Amway. Special guests included Joseph Mariano, President of the U.S DSA; Ross Creber, President of the DSA of Canada; and Charlie Orr, Executive Director of the Direct Selling Education Foundation.

During the celebration, DSN also presented its BRAVO Awards for excellence. Nu Skin was honored with the Humanitarian Award for its Nourish the Children initiative, which provides the company’s nutritional supplement VitaMeal to starving children around the world. ViSalus was honored with the Growth Award for its sales increase of $34 million in 2010 to $231 million in 2011. Doug DeVos, President of Amway, was honored with the Leadership Award for the record sales growth Amway has achieved since he took over the presidency in 2002.

Click here to see the Global 100 Ranking.


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DSN 100 Awards DSN 100 Awards DSN 100 Awards
DSN 100 Awards DSN 100 Awards DSN 100 Awards
DSN 100 Awards DSN 100 Awards DSN 100 Awards
DSN 100 Awards DSN 100 Awards DSN 100 Awards

 

Filed Under: Daily News

North American Power: Kilowatts into Kindness

July 3, 2012 by DSN Staff Leave a Comment

North American Power works with charity organization Save the Children to help children like 8-year-old Charles in Zomba, Southern Malawi. Photo Credit: Save the Children – Amos Gumulira


Click here to order the Direct Selling News issue in which this article appeared.


North American Power is a retail energy supplier whose rapid growth has been fueled by a different form of energy—the power of compassion.

North American Power

Company Profile

  • Launched: 2009
  • Headquarters: South Norwalk, Conn.
  • Founders: Kerry Breitbart, CEO; Carey Turnbull, Chairman
  • Products: Retail electricity & natural gas
Kerry Breitbart
Kerry Breitbart
Greg Breitbart
Greg Breitbart

Launched in 2009 by Kerry Breitbart and Carey Turnbull, the company has already been listed at No. 57 on the December 2011 Forbes List of America’s Most Promising Companies. Now one of the fastest-growing companies within this $70 billion industry, North American Power does not measure its success through top-line revenue growth or even through bottom-line profit. Rather, it bases its success on how much it donates to charity.

“We launched a program called Mission to Millions, through which each of our customers can select their charity of choice from a list of featured partners, and every month we will give $1 on their behalf to support that organization,” says Kerry Breitbart, CEO of North American Power. “Our goal is to grow to the point that our customers are generating over $1 million per month for some of the most deserving charities in the world.”


“Our goal is to grow to the point that our customers are generating over $1 million per month for some of the most deserving charities in the world.”
—Kerry Breitbart, CEO


A Powerful Change in Energy Supply


How It Works

SAVE: North American Power has saved its customers millions of dollars on their electric bills while also promoting at least a 25 percent reliance on renewable energy sources.

GIVE: Customers select a charity that will receive a $1 donation from North American Power each month they are active customers.

SHARE: All customers automatically receive a free, personalized website to share with their family and friends to earn referral income.

EARN: The “zero-risk, zero-investment” business opportunity allows representatives to earn additional income without an upfront investment or mandatory monthly purchases.


North American Power emerged in 2009, after energy deregulation gave customers in 25 states the power to choose who supplies their energy. In most instances, customers are still billed and serviced by their local utility, but their energy supply can be provided by companies like North American Power. As Breitbart explains, “We are focused on saving them money and delivering additional benefits besides simply keeping the lights on.”

The company competes with traditional utilities by using their infrastructure to deliver energy that North American Power purchases in the wholesale market. With a senior management team that boasts more than 100 years of combined experience in the energy business, North American Power is aggressively expanding across the East Coast and into the Midwest. The company is based in Connecticut and currently serves customers in other deregulated energy markets such as Illinois, Maryland, New Jersey, New York, Ohio and Pennsylvania.

North American Power focuses on providing access to “homegrown renewable energy.” In fact, every customer who switches to North American Power automatically chooses 25 percent renewable energy and has the choice to upgrade to 100 percent renewable energy. In addition to helping their customers save money, the company is working to change the way that Americans power their homes and lives.

“The word save has multiple meanings for us,” says Chief Marketing Officer Greg Breitbart (son of CEO Kerry Breitbart). “Within our core product in the deregulated areas, it’s about the potential to save money. Our customers have saved around $5 million since we started service. However, it is also about saving the environment through our focus on wind power and renewable energy. This also supports our country’s future by relieving our dependence on foreign energy.”

From saving money to saving the country, North American Power is rapidly changing the way that retail energy suppliers operate. And with their integrated approach to corporate philanthropy, they are also transforming the way that direct sales companies can approach charitable giving.

A Transformative Business Model

Kerry Breitbart had previously managed an international brokerage involved in energy products such as crude oil, but had no experience in retail marketing prior to launching North American Power. But his previous success in the network marketing industry convinced him that direct sales could provide a remarkable opportunity for his new company.

He and Co-Founder Carey Turnbull hired a consultant to help build the network marketing component and launched North American Power as a direct seller in March 2011.

Kerry Breitbart says, “Our zero-risk, zero-investment model is all about creating a life-supporting business.”


“We are not just a retail electricity supplier or a network marketing program; we are a multi-level customer referral program.”
—Greg Breitbart, Chief Marketing Officer


CMO Greg Breitbart adds, “We see ourselves in our own segment. We are not just a retail electricity supplier or a network marketing program; we are a multi-level customer referral program. We took the pay structure of network marketing and tacked it onto the ease of a customer referral program.”

The approach has allowed North American Power to aggressively promote its core product to retail customers who are not interested in the referral program while also equipping each of its customers with the ability to share the company with their contacts. Greg Breitbart explains, “As we developed our messaging, it was very important that we kept the referral model while not putting off potential retail customers.”

This led the company to develop a very innovative approach to market segmentation—a retail site promoted through NApower.com that emphasizes the potential to save money on your utility bill, and a separate site through NApower.biz that promoted the business opportunity to those interested in building a network marketing organization. However, the interface for registration is the same for both customer segments, allowing those who are focused simply on purchasing the retail product to get exposed to a fast and free way to earn money through referrals. According to Greg Breitbart, “Every customer who registers is provided with a unique web page that they can share with others in order to begin earning immediately.”

Customers who successfully refer three friends or family members within 30 days can earn $50 and keep earning every time they share North American Power’s products. Additionally, customers interested in the business opportunity can sign on as independent representatives to achieve greater earnings.

This “zero-risk, zero-investment home-based business opportunity” is one of the three pillars of North American Power’s culture. Combined with the other pillars of sustainability and charity, this approach turned North American Power into one of the fastest-growing entities in its industry. The company experienced 400 percent year over year growth from 2010 to 2011—from $25 million in 2010 revenues to $124 million in 2011 revenues.

A Social Enterprise

With a degree in economics and a focus on social entrepreneurship, Greg Breitbart brings a slightly different perspective to his job than most CMOs. North American Power was initially launched without a formal corporate giving program, but his focus on “doing well while doing good” has led the company to integrate philanthropy into every aspect of its operation.

As he explains, “We knew we would donate, but we wanted to do it in a unique way. Many companies donate without it being noticed. We wanted to engage our customers in deciding where we donate. This way, we ensure that the giving program makes the greatest impact on our community while also connecting our customers to our company. We have found that our customers are more likely to stay with us because of our charitable giving program, and they are much more likely to share the business with others.”

He continues: “The deregulation of energy is the greatest opportunity to hit this industry, but it’s not connected to hearts—it’s a commodity. By connecting our business model to charity and to network marketing, we bring the heart component that is allowing us to build a compelling case for this commodity product.”

This image has also allowed the company to shift the way it promotes success among its representatives. While most direct selling companies celebrate earnings, North American Power celebrates their representatives’ giving. For example, at a recent gathering of top producers, a special acknowledgment was given to a representative in New Jersey whose organization was responsible for nearly $14,000 in charitable donations and is now on track to collectively contribute more than $150,000 in 2012.

This message of emphasizing “giving over receiving” is a critical element of the brand, according to Greg Breitbart: “When you feel that you’re sharing something good, it’s much easier to share than something that is just about making money.”

This has allowed the company to avoid making a distinction between their customers and their representatives. They want to focus on “giving everyone the opportunity to give.” Additionally, this provides representatives with the ability to focus on recruiting people to support their cause instead of simply changing their energy supplier. For example, says Greg Breitbart, a customer with a child who is suffering from a specific condition could steer her referrals to support the charity that addresses it.


Children who were helped by Save the Children share a story book during class in Zimbabwe.
Children who were helped by Save the Children share a story
book during class in Zimbabwe. Photo Credit: Save the Children – Eileen Burke
Children play at a Save the Children Child Friendly Space in Ishinomaki, Japan, 13 days after the town was struck by a devastating tsunami.
Children play at a Save the Children Child Friendly Space in Ishinomaki, Japan, 13 days after the town was struck by a devastating tsunami. Photo Credit: Save the Children – Andrew Wander

Mission to Millions

The initial approach to corporate giving was Perpetual Giving, which was offered as a fundraising program for local charities, churches and associations. Aimed at smaller groups and with no dedicated staff to drive it internally at North American Power, the program struggled.

According to Greg Breitbart, “We quickly learned that the program could be more beneficial to larger organizations with a strong base that could support it, which led us to Mission to Millions. The pitch was much easier, and it was more successful for everyone. We even had nine of our nonprofit partners attend our last annual conference.”


In 2011, the company donated more than $100,000 to partner organizations, including Action Against Hunger, Malaria No More, Dress For Success and Little Kids Rock.


Launched in April 2011 alongside the launch of the network marketing business opportunity, Mission to Millions is an ongoing philanthropic initiative that allows customers to direct $1 from North American Power’s funds to deserving charities each month when they pay their bill. In 2011, the company donated more than $100,000 to partner organizations, including Action Against Hunger, Malaria No More, Dress For Success and Little Kids Rock. The company is on track to exceed that amount of giving in 2012 just based on first quarter donations.

“The name of our philanthropic giving program is the implied goal—to donate $1 million per month,” says Amy Nelson, North American Power’s Director of Charitable Partnerships.

“We wanted to show the impact of the program, so we focused on organizations that could do a lot with a dollar,” she says. “When customers register, they can see national charities as well as a local list of charities that are only shown to people in their market. We utilize Charity Navigator to screen new charities to ensure that they are good stewards of the funds. We also focus on organizations that make a lasting impact.”

According to Kerry Breitbart, the initiative “took me an evening to digest at first, but made much more sense as I thought about it.” While it was initially intimidating to consider donating 15 percent of the company’s profit each month to charity, he confirmed that net profits have increased significantly, thanks to the program’s ability to attract new customers. Additionally, while Mission to Millions was intended to be simply a part of the company’s branding, it has now impacted “all other aspects of the business, including our focus on sustainable energy.”

Save the Children

One of the largest beneficiaries of the Mission to Millions program so far has been the international Save the Children charity, which works in 120 countries and eight U.S. states. According to Megan McLain, the Associate Director of Corporate Partnerships for Save the Children, “Our mission is to create lasting change for children. Our core focus is on health, HIV/AIDS, livelihoods and emergencies. We serve the whole child in all aspects.”

McLain says she has been deeply impressed by the team at North American Power, whom she describes as being “so passionate about this mission and making it an integral part of their growth.” Additionally, she explains that the company’s gifts of “unrestricted resources” are very unique among corporate donors, who frequently direct dollars to specific focus areas. Receiving unrestricted gifts “is vital to everything from keeping the lights on to running a program in East Africa.”

A Happy Surprise

Twenty years ago, Kerry Breitbart went to a physician who specialized in endocrinology at the time. After he launched North American Power, he was re-introduced to the doctor as someone who was interested in the work that his company was doing. The physician was intrigued by the deep impact that the company was making not only on its customers and on its charitable partners, but also on the happiness of its representatives.

The physician’s name? Dr. Deepak Chopra.


“North American Power offers a unique opportunity to create a life of abundance for anyone who wants to help create a sustainable and healthy world.”
—Dr. Deepak Chopra, mind-body medicine expert and advisory board member


Having since emerged as an international speaker on the topics of spirituality, happiness and mind-body medicine, Dr. Chopra immediately recognized the difference within North American Power’s business model. He is now on the company’s advisory board. In a written statement, Dr. Chopra says, “North American Power offers a unique opportunity to create a life of abundance for anyone who wants to help create a sustainable and healthy world.”

Kerry Breitbart says, “Deepak has taught us that, while making money is important, how you make that money makes a giant impact on your happiness. Many of our reps were once in programs that were focused only on how much money they could get, and they are now focused on how much money they can give through North American Power.”

The CEO says he knew that the charitable giving program would make a big impact on its beneficiaries, but he was surprised by the impact it made on the company’s representatives. The company launched a Facebook page for its representatives, and most of the feedback has been focused on the charitable giving component.

“Deepak has said that our business model hits on four of the five pillars of happiness,” says Kerry Breitbart. “We have an opportunity to become a $1 billion company and to make an impact on what it means to be a good corporate citizen. We want to promote an enlightened form of self-interest in which giving is as important as receiving.”

Filed Under: Feature Articles

Retirement Risk Index Increases

July 2, 2012 by DSN Staff Leave a Comment

Retirement Risk Index IncreasesOne of the unique characteristics of direct selling is that it has no boundaries when it comes to age. Whether you are a teenager or octogenarian, you have the same opportunities as everyone else to build a successful business.

And that’s good news for Baby Boomers entering their retirement years.

A recent study by the Center for Retirement Research at Boston College found that more than half of retirees will not be able to fully support themselves in their golden years.

Alicia Munnell, Director for the Center, attributes the increase in the National Risk Retirement Index—the number designated to maintain a standard of living upon retirement—to three factors: people are living longer, Social Security benefits will diminish, and interest rates will not allow those with nest eggs to produce significant income.

The answer to this crisis, says Munnell, is not for people to save more but to work longer, on average five years past their intended retirement age.

Direct selling may be the answer for these Baby Boomers. According the 2010 DSA statistics, nearly 50 percent of U.S. direct sellers were over the age of 47, with 15 percent age 65 or more. In 2011, more men entered direct selling, accounting for 22 percent of direct sellers.

What we appreciate about direct selling are the vast opportunities available to young and old alike to earn additional income to supplement their lifestyles, and in this case, their golden years.

To view the video from the Center for Retirement Research, click here.

Filed Under: Daily News

Wear to Share: The Power of Branded Apparel

July 2, 2012 by DSN Staff Leave a Comment

DSN July 2012


Click here to order the Direct Selling News issue in which this article appeared.


The objective of traditional advertising is always the same—to interrupt consumers in order to create interest in a sales message. Unfortunately for the companies trying to advertise, consumers have become more and more adept at ignoring these messages. But even in today’s oversaturated advertising climate, the one sales message that can break through the clutter is the recommendation of a friend—an integral part of word-of-mouth advertising. And one very powerful medium for stimulating word-of-mouth advertising is the wearing of branded apparel.

Be the Billboard

By choosing to wear a company’s name, logo or message, you are proudly standing with that brand and what it represents. You act as a walking billboard. In fact, the choice to wear that shirt, cap, jacket or even a button can have a far greater impact than any actual words.

Branded apparel definitely drives engagements and creates inquires. For the independent distributor, wearing clothing displaying their company’s information can activate a dialog that might not otherwise occur. Robin Stevens, Ambit Energy’s Vice President of Marketing Services, says, “For our consultants, we’re always looking for a way to start a conversation. When others see their shirt or cap, they often ask, What is Ambit Energy? or, Where did you get that cool shirt?”

 

Building a Strong Brand

Just how important is a strong brand to a company? Jonathan R. Copulsky, Principal at Deloitte Consulting LLP, in his book Brand Resilience: Managing Risk and Recovery in a High-Speed World, provides this quote from Benoit Garbe, Vice President at Millward, Brown and Optimor:

“In 1980, virtually the entire value of an S&P 500 company consisted of tangible assets—buildings, machines, inventory, etc. A 2010 study by Millward, Brown and Optimor found that today, these tangible assets account for only 30 to 40 percent of a business’ value. The rest is intangible value, half of which—30 percent of total business value—is attributable to brand. For many companies, brand is their single largest business asset.”

What can a strong brand do for your company? While volumes have been written on the topic, here are a few points to consider:

  • A strong brand makes it easier for the salesforce to sell.
    When your company’s brand is already a known and respected entity, your salesforce can tap into that equity that has already been built up. They don’t have to reinvent the wheel, so to speak, each time they make a presentation. Potential customers are more likely to already have a frame of reference.
  • A strong brand makes it easier for customers to buy.
    As Alina Wheeler points out in her book Designing Brand Identity: An Essential Guide for the Whole Branding Team, “Compelling brand identity presents any company, any size, anywhere with an immediately recognizable, distinctive professional image that positions it for success.” By investing in establishing a strong brand identity, a company can help level the playing field with its customers, even one that may seem tilted toward its competitors.
  • A strong brand delivers a message to consumers.
    A brand stands for more than just a name, logo, product or service. It’s the gestalt, the whole enchilada, the unified concept and collection of all things pertaining to your company. Once your company has established a strong brand identity, your brand doesn’t necessarily need words to speak volumes. After all, you only need to hear that distinctive motorcycle sound for the Harley-Davidson brand to come to mind. Strong brands are able to communicate across various forms of media and to diverse audiences and cultures.

Putting It All Together

Thoughtfully designed branded apparel can play a significant role in a company’s total branding efforts and reinforce the strength of its brand. As Mark Pentecost, CEO and President of It Works! Global, can attest, branded apparel can provide a definite boost, both psychologically to distributors and to the company’s bottom line as well. His company’s newly redesigned apparel line has not only proven to be popular with distributors, but it also helps unify and strengthen the company’s centralized branding theme. “We put a lot of strategy behind it,” says Pentecost, “because we realize how important the apparel is.”

For It Works!, the company’s focused efforts have paid off in a big way, coming together to create what Pentecost calls a “perfect storm.” And he continues, “Since January of this year until now [May 31], we’re up over 400 percent.” As this company can attest, a strong brand is indeed a valuable and powerful asset.

There’s no doubt that a carefully designed message worn on your person can serve to attract others and help start conversations. Consider, for example, the success Herbalife experienced early on with its button, Lose Weight Now—Ask Me How. This single message conveyed the Herbalife brand, offered hope to those struggling with their weight and actually provided them with the question to ask the wearer. This button literally propelled Herbalife to the forefront of the weight-loss world and into the collective consciousness of Americans everywhere.

The attraction of wearing something that “advertises” a brand also speaks to one of the big problems direct sellers face—rejection. Starting a conversation out of the blue can be a difficult skill for a newcomer to master. But when someone is asking about your T-shirt or button, they are making the first move, and are much more likely to be receptive to your message. They may even tell you of someone else they think might be interested, thus generating another powerful form of word-of-mouth advertising—a personal referral.

Many companies have come to understand the importance of their branded apparel and take the design of these items quite seriously. Several whose representatives spoke with DSN recently note that they are in the process of redesigning their clothing. Not only do they want their clothing to be up to date, but they also wish for it to reflect very positively on the company and be in line with their company’s growth.

Blake Mallen, Co-Founder and Chief Marketing Officer for ViSalus, says, “We’re growing so fast right now that we’re a different company today than we were six months ago, just as we’ll be a different company six months from now. As we work toward becoming a billion-dollar company, we want our clothing to reflect that.”


“We’re growing so fast right now … we want our clothing to reflect that.”

—Blake Mallen, Co-Founder and Chief Marketing Officer, ViSalus


Advertising by way of consumer wearables is common across all industries for the simple reason that it works. Consider how many items carry the Coca-Cola brand image. Coke even recently premiered its Coca-Cola Clothing 2013 Spring/Summer Collection at Fashion Rio in Brazil. Clearly, consumers are willing to spend their money on items that share the brand in the most personal way—by wearing it.

Companies have also come to realize they need to have clothing designed to flatter females and appeal to feminine tastes, as women make up the majority of independent representatives. Stevens notes, “We’ve had a big demand from our top women consultants for more of the ‘blingy’ Ambit wear. They don’t want to wear a guy’s polo with the logo on it particularly; they want something that’s more feminine.”

It Works! has also made a concerted effort to update its apparel and frequently incorporates bling in the design. With approximately 70 percent of its distributors being women, Mark Pentecost, CEO and President of It Works! Global, received another bit of feedback: Not only has the company’s clothing proven to be popular, but the women, in particular, have told him they like not having to worry about their wardrobe. The clothing is well designed and flattering, so they don’t have to think about what to wear. They can just put on their “black, green and bling” and go.


Ambit Energy
Ambit Energy
Beachbody
Beachbody
HerbalifeHerbalife

Serves as a Powerful Marketing Tool

Branded apparel has indeed proven to be a versatile and powerful marketing tool. DSN called on several companies recently and asked them to share the advantages they have realized from their use of branded apparel.

Leverages Other Marketing Efforts

Beachbody started using infomercials over 12 years ago and with them has built tremendous brand awareness. As a result, Beachbody coaches often gain instant recognition when they wear their company’s branded apparel.

Getting the proverbial “foot in the door” is typically the hardest part of making a sale. Beginning a conversation with a stranger can be awkward for all parties involved. Wearing a brand slogan creates business-building opportunities for independent representatives. “The clothing has been a huge benefit for our coaches,” says Denise Needham, Beachbody’s Senior Director of Training and Field Development. “When they ‘Wear and Share’ their P90X cap or shirt, people respond. It usually sparks a conversation with a stranger.” Because their apparel is often able to play off the company’s other marketing efforts, Needham notes, “Sometimes all our coaches have to do is just be ready!”

Creates Company Awareness and Corporate Identity

Ambit Energy provides residential and commercial customers with energy. Because the company sells a service, there are no physical products with which its consultants can identify. And because the company only services deregulated markets, the states in which it operates are scattered: Texas, New York, Illinois, Maryland, Pennsylvania and New Jersey. So, for the company’s 150,000 plus consultants who are likewise scattered around the country, Ambit’s branded apparel helps establish for them that sense of corporate identity that might otherwise be lacking.

Ambit’s branded apparel also helps create awareness for their company. Stevens says, “To expand our reach and give credibility to our brand name, and also to make our consultants feel a part of the team, we use a lot of branded apparel.”

Ambit uses so much branded apparel and other branded items that the company recently hired a full-time merchandise manager. As Stevens explained, they want their branding to remain consistent, and they want to make sure that their inventory is both fashionable and readily available in the company’s store. And with the company’s rapid growth, the demand by its consultants is expected to increase even more.


Momentis
Momentis
ViSalus
ViSalus
It Works! Global
It Works! Global

Promotes the Company Culture

With more than 150,000 people joining the Body by Vi 90-Day Challenge each month, ViSalus expects to pass its one millionth customer mark soon. In introducing these newcomers to the company, ViSalus uses its branded clothing to reflect the culture of the company.

“Our company offers a lot of apparel,” says Mallen. “We try to offer more of a high-end fitness apparel line called Vi-Gear.” He also notes that the company plans to introduce a more fashion-oriented line of higher-end casual fitness clothing. Creating fashionable branded clothing actually fulfills a dual purpose—the distributor is rounding out his or her wardrobe as well as promoting their business. They are much more likely to keep wearing an item that makes them feel good as well.

ViSalus has attracted a number of celebrities to its company, so projecting the culture of its company through its clothing is doubly important. Always with an emphasis on quality, Mallen notes that the company seeks to offer fashionable, cool-looking clothes that people would want to wear anyway.

Fills a Marketing Void

Although there are some notable exceptions, the vast majority of direct sales companies sponsor very little, if any, traditional advertising done from the corporate level. As Douglas Braun, USANA’s Vice President of Marketing and Recognition, points out, branded apparel can help fill that void.

“It’s not necessarily a void for connecting with potential new customers,” he explains. “Our associates are doing that, and the branded apparel does play a role there.” But Braun goes on to explain, “Branded apparel helps fill the void that traditional advertising fills for current customers and current associates in connecting them with the brand. Advertising is really directed at both audiences. That’s the part I think we miss the most in not doing traditional advertising—the furthering and strengthening of that relationship and connection with the customer and the associate to the brand.”

As these and many other companies can affirm, thoughtfully designed branded apparel can serve many purposes. It has proven to be a valuable asset as well as a powerful marketing tool. As a form of word-of-mouth advertising, the messages it can convey bypass the traditional media forms of advertising and help the company break away from the pack.


What Are the Most Popular Promotionals?

Calendars were, for many years, the top item that companies used for promotional purposes. They are still popular, and for good reason—calendars keep the company’s name in front of people for the whole year. But according to data provided at the website of the Promotional Products Association International, wearables accounted for the greatest percentage of the industry’s sales in 2011, as they have for a number of years now. These items include shirts, aprons, uniforms, blazers, caps, headbands, jackets, neckwear, footwear, and more.

Why Do Companies Purchase?

Companies purchase promotional items for a number of reasons. It may come as no surprise that Brand Awareness garnered the top slot in program initiatives for 2011.

Chart

Source:  http://www.ppai.org/inside-ppai/research/Documents/2011%20SalesVolume%20Sheet.pdf

 


 

Taking Their Brand to the Big Leagues

by Marilynn Hood

USANA sponsored the 2011 Snowboardcross Cup held at Telluride, Colo.USANA sponsored the 2011 Snowboardcross Cup held at Telluride, Colo. Photo credit: Oliver Kraus


Have you ever taken a tour of a stadium or arena? With all the fans gone, you can actually hear someone yell at you from the top row. But when the game begins and everyone starts to cheer, individual noises simply blend into the roar of the crowd. It becomes harder and harder for any one person’s voice to be heard above so many competing noises.

For companies marketing their goods and services today, it’s much the same. They find themselves entering an already packed arena, competing for air time or billboard space and struggling to create a method of presentation that somehow allows their message to be heard above the ever-increasing advertising noise and clutter.

But what if a company sponsored one of the teams down there on the field? What if the company’s name was associated with athletes who capture every eye in the arena, on whom every camera is focused, whose images are being beamed into living rooms around the world? Or what if the company had its name on the arena itself? Several direct sales companies have employed this big thinking with their marketing, and with good reason.

“One of the advantages of sponsoring athletes or an event or putting your name on a stadium or arena is that you address one of the biggest issues in marketing, which is advertising noise or clutter,” explains Dr. Paul S. Busch, Professor of Marketing at Texas A&M University’s Mays Business School. Granted, there may be other advertisers present, but the company’s name stands above the crowd.

Another reason companies consider sponsorships is that sports provide an almost universal appeal, around the country and around the world. That’s because sporting events offer entertainment, and an association with sports is generally viewed positively. And, as Busch points out, it’s one of the very few forms of intergenerational entertainment that we have. Consider that you often see a variety of age groups attending such events together, sitting side by side enjoying each other’s company and creating wonderful memories. Few other activities hold such broad appeal for all generations.


One reason companies consider sponsorships is that sports provide an almost universal appeal, around the country and around the world.


Herbalife sponsors over 150 teams and athletes, including the Los Angeles Galaxy soccer team pictured here, home of superstar David Beckham.
Herbalife sponsors over 150 teams and athletes, including the
Los Angeles Galaxy soccer team pictured here, home of superstar David Beckham.
Rising NASCAR star Austin Dillon stands with the legendary No. 3 race car, displaying AdvoCare’s sponsorship front and center.
Rising NASCAR star Austin Dillon stands with the legendary No. 3 race car, displaying AdvoCare’s sponsorship front and center.

Providing Powerful Marketing Opportunities

Whether it’s with individual athletes, an entire team or a sports stadium or arena, there’s no doubt that an association with athletes can create very powerful marketing opportunities. Particularly for companies that provide nutritional products, an endorsement by athletes helps validate the effectiveness of those products. And, with certain organizations suggesting that athletes not take any nutritional supplements due to the possibility of contaminants or banned substances, it speaks to the trust the athletes have placed in these companies and their products.

USANA sponsors a number of both individual athletes as well as entire teams. Knowing that these athletes are placing their careers and reputations on the line when they take the company’s supplements, USANA executives say they take the trust of these athletes very seriously. In return for the trust that their sponsored athletes place in USANA, the company essentially provides a guarantee of up to $1 million if an athlete tests positive for a banned substance. USANA knows if they can gain the trust of athletes, even Olympians who may have only one shot in their lifetime to go for the gold, they will gain the trust and confidence of thousands of others as well.

With sporting events being enjoyed by millions worldwide, the interest in sports is almost universal. Sports sponsorships tap into that popularity and provide companies with a way to greatly extend the reach of their marketing efforts. Team 4Life is an elite group of world-famous athletes who endorse 4Life Transfer Factor® products. Members include Super Bowl Champion Sam Madison, World Series Most Valuable Player Edgar Renteria, World Golf Hall of Famer Johnny Miller, powerlifter Brady Stewart and others. Calvin Jolley, Vice President of Communications, says, “Branded apparel gives our All-Stars an opportunity to express their commitment to 4Life products, which empowers our independent distributors to begin conversations about our company. And when customers have questions about efficacy, our field can point to individuals who excel in their disciplines and are willing to endorse the value of our science by wearing our logo.”


“Knowing that top professionals rely on AdvoCare products on and off the field affirms AdvoCare products are safe, effective and they work.”
—Richard Wright, President and CEO, AdvoCare


AdvoCare also sponsors athletes for similar reasons. AdvoCare President and CEO Richard Wright says, “When people see a top sports figure wearing an AdvoCare logo, it brings awareness to the brand while elevating the company. Knowing that top professionals rely on AdvoCare products on and off the field affirms AdvoCare products are safe, effective and they work. It is also powerful reinforcement of our brand statement—Use It. The Pros Do.”

Herbalife implemented a total sports strategy about 10 years ago as part of their effort to more fully brand the company. As Rob Levy, Executive Vice President of Worldwide Sales and Marketing for Herbalife, says, “We wanted to create an identity out there in the sporting community.”

One of Herbalife’s biggest deals early on was to sponsor the Los Angeles Galaxy, a Major League Soccer team. As luck, or in this case, fortune, would have it, shortly after their sponsorship began, David Beckham came to play for the Galaxy. Because he is arguably the most famous soccer player in the world, Beckham’s Galaxy jersey—with Herbalife’s name prominently displayed across the front—has become one of the biggest-selling jerseys in any sport of all time. Says Levy, “We’ve seen that jersey in countries all over the globe.”

Herbalife now sponsors over 150 teams and individual athletes, with several athletes set to compete in the upcoming Olympics in London. The company’s sponsorships extend to a wide variety of sports, including tennis, badminton, cricket and boxing. Other top teams Herbalife sponsors include FC Barcelona, with its world-class player Leo Messi having a personal sponsorship agreement. Most recently, the company announced it will again sponsor the 2012 World Football Challenge in the summer. This soccer exhibition tournament last year drew over half a million attendees.

Realizing the importance of continuing its relationship with the Galaxy, Herbalife made this statement in a March 16, 2012 press release:

“The 2011 MLS Cup Champion LA Galaxy and Herbalife announced today a record 10-year extension to their existing agreement that will see the global nutrition company continue as the official presenting sponsor and jersey sponsor of the Galaxy. The landmark extension to the partnership will run through the 2022 MLS season and is valued at over $44 million, making it the single largest and longest sponsorship agreement for an MLS club in League history.”

With Herbalife’s name to continue to appear prominently on the front of the club’s jersey and with Herbalife remaining the Galaxy’s official and exclusive nutrition partner, the impact of this sponsorship alone will be enormous. Herbalife has indeed created a distinctive and enviable identity in the sporting community.


The 2011 MLS Cup Champion LA Galaxy and Herbalife announced a record 10-year extension to their existing sponsorship agreement, which is valued at over $44 million.


Liezel Huber is the No. 1 doubles tennis player in the world and USANA Brand Ambassador.
Liezel Huber is the No. 1 doubles tennis player in the world and USANA Brand Ambassador.
The Amway Center, a multiuse facility for entertainment, sports and other city events, opened in 2010 in Orlando, Fla.
The Amway Center, a multiuse facility for entertainment, sports and other city events, opened in 2010 in Orlando, Fla.  Photo credit: Ben Tanner
Edgar Rentería, five-time MLB All Star and the 2010 World Series MVP, uses and endorses 4Life products.
Edgar Rentería, five-time MLB All Star and the 2010 World Series MVP, uses and endorses 4Life products.

Capitalizing on a Prime Destination Spot

Amway is another company that has gone big with its marketing efforts. By locating its new arena in Orlando, Fla., the company is well-positioned to capitalize on an already popular destination area. This versatile facility has been designed to host a variety of events, such as concerts and ice shows, in addition to sports of almost every kind and is home to the NBA’s Orlando Magic. To learn more about the Amway Center, DSN called upon Amway Chief Marketing Officer Candace Matthews, who had this to say:

“When we cut the ribbon at the Amway Center in 2010, it became the first high-profile venue to showcase our new brand identity. Amway is the official vision partner of the Center, but this is much more than placing our name on the building; it’s a true partnership with the community and city to create a one-of-a-kind experience for guests. Part of that experience is the technology used in the LEED-certified building, from 1,200 LED screens that can be tailored to each event at the Center to the LED ‘ribbon’ that allows 360-degree messaging around the inside of the center. The technology, experience and service recently earned the Amway Center honors as the 2012 Sports Facility of the Year.

“Of course, you can see the Amway name from the air, on the ground from blocks away, and throughout the complex, including center court and the scoreboard. That bigger-than-life exposure brings our identity to hundreds of thousands of Amway Center visitors each year.

“The Amway Center is also a big way of spreading our brand across the globe. Many of our distributors are huge NBA fans, and some of our distributor leaders even traveled internationally to Orlando to attend the 2012 All-Star Game. Orlando is a global destination and Amway Center is a major family entertainment venue, just like Disney World and Universal Studios. And when events at the Amway Center are broadcast to a global audience, they bring our name to potential customers and inspire pride in our distributors all over the world.

“For those who attend events at the Amway Center, the Nutrilite Magic Fan Experience, which features interactive Nutrilite displays and a history of the Orlando Magic, provides an opportunity to get to know the world’s best-selling nutrition and wellness brand, Nutrilite.

“The partnership has been a win-win for Amway. It’s a smart investment, innovative, and we’re proud to have our name on this state-of-the-art, award-winning facility.”

As these and other companies have found, big branding, particularly when associated with sports, can produce almost exponential rewards. They are able to powerfully amplify their marketing efforts and extend their reach to almost every corner of the world, far beyond what they would otherwise be able to do. Rather than being just another voice in the crowd, they actually transcend the crowd.

Filed Under: Cover Stories

Fueling Growth at 5LINX

July 2, 2012 by DSN Staff Leave a Comment


Click here to order the Direct Selling News issue in which this article appeared.


5LINX


Company Profile

  • Founded: 2000
  • Headquarters: Rochester, N.Y.
  • Top Executives and Founders: President & CEO Craig Jerabeck, EVP of Marketing Jeb Tyler and EVP of Sales Jason Guck
  • Products: Essential products and services for home and business
5LINX founders are Jeb Tyler, Craig Jerabeck and Jason Guck.

5LINX founders are Jeb Tyler, Craig Jerabeck and Jason Guck.

Some companies seem to have it all. Fast-growing 5LINX® is one of them.

Just check out these key 5LINX VIP characteristics:

  • A cultural foundation that drives every aspect of the business
  • A growing suite of services that customers—including businesses— already use, but which 5LINX provides at budget-friendly rates
  • A carefully crafted compensation plan that fuels growth among both the leadership and new-distributor ranks

Those are just the beginnings of an impressive checklist that has created an equally impressive inventory of accolades. For example, Inc. magazine has recognized 5LINX as one of the country’s fastest-growing privately held companies in the country every year since 2006. In addition, in its hometown of Rochester, N.Y., 5LINX has made the list as one of the top 100 companies in the region. And this year the company burst onto the Direct Selling News Global 100, the magazine’s annual list of the top revenue-generating direct selling companies in the world, at No. 76, with 2011 revenues of $81 million. It is on track to double those numbers in 2012 and executives have a five-year goal to grow to over $1 billion in sales.

Telecommunications brought 5LINX Founders Craig Jerabeck, Jeb Tyler and Jason Guck together. Jerabeck had an extensive entrepreneurial background, including starting two previous companies that sold retail wireless and wireless phone store franchises. Tyler and Guck each represented a network marketing company that sold long-distance services. Tyler met with Jerabeck to discuss providing those services to Jerabeck’s business. Instead, Jerabeck asked if Tyler could sell cellular products.

The idea didn’t gel immediately, but two years later the three men got together again. This time they hatched the idea for 5LINX. Jerabeck’s business acumen was a perfect fit with Tyler and Guck’s direct selling backgrounds, and they all had experience in telecommunications. But what united them was their determination that their new company would operate ethically and with absolute dedication to its direct selling independent marketing representatives. From the outset, they identified the five principles that would form the foundation of their business: vision, integrity, opportunity, freedom and success. The principles were so important that they even inspired the company name.

Essential Opportunity

Once that foundation was firmly set, the men launched their new business with monthly services that included digital phone service, wireless phones, calling plans and accessories and broadband Internet service. Soon their lead product was videophone service, and they quickly offered service to small-business clients. Every service was one that customers already used and were familiar with. The 5LINX value proposition was simple: Just switch the service you already use to 5LINX and save money.

But the founders always kept their eyes open for other ways their independent marketing representatives could earn money. Over the years the 5LINX product line expanded to include energy, home and business security systems, identification theft protection, satellite television service, text marketing, mobile video apps, a new data storage/backup product, and a state-of-the-art Android-based tablet. It also began offering innovative, bundled services to business clients that created cost savings for customers and commission opportunities for representatives. The company had morphed from a telecommunications service provider to an essential services company for both home and commercial clients. As customers paid their bills for the services every month, the 5LINX independent marketing representative who enrolled them earned monthly commissions without the need to resell to that customer—genuine residual income. Everybody was a winner.

Then came 2009—a year that went down in infamy for too many companies in every industry. But 5LINX executives saw opportunity in the weak economy. After all, individuals and businesses everywhere needed to save money more than ever. And with job losses and cutbacks creating high unemployment—as well as feelings of insecurity among people who still had jobs—people needed a Plan B. So 5LINX adjusted its compensation plan to make it even richer. The result: Business tripled in 18 months because of new independent representatives coming into the business.

The strong compensation plan that rewarded the sale of essential services created enormous opportunity for the company’s growing cadre of enthusiastic representatives. Each home service gave them at least one customer point, so each home or business often represented several points—and several earning streams—to a representative. Plus, when representatives join 5LINX, they typically switch every service they already use from their incumbent provider to 5LINX, racking up customer points through their own services while learning about them and laying the foundation for their residual income. It prepares them to begin telling friends and family members how they, too, can save or make money. But the big game changer is commercial service. As 5LINX beefed up its commercial offerings, the business professionals who reviewed their proposals could easily see the savings to their businesses. At the same time, they also clearly saw the 5LINX business opportunity could supplement their personal income statement. Both the savings and the earnings could be substantial.

“Commercial services attract a different type of representative—commercial real estate brokers, high-level executives, hedge fund managers—because of the people they know,” explains Jason Guck, 5LINX Executive Vice President of Sales. “We proposed an energy services contract to one business in New York City recently that saved it $1.3 million a year. That single contract will generate $20,000 for the 5LINX representative who identified the opportunity. When we can propose to schools and commercial buildings, we see our rep base diversify into higher-level professionals with contacts like themselves.”


5LINX Velocity™ tablet
5LINX Velocity™ tablet
5LINX Credit Card Processing
5LINX Credit Card Processing
5LINX High Speed Internet
5LINX High Speed Internet

Business Is Booming

An expanding product line and the income opportunity offered by commercial services have created a boom in business. Month after month 5LINX has seen increases in representative recruitment, new customers and revenues all over the United States and Canada. While 5LINX representatives usually gather customers one by one, they typically host public business receptions in their homes or off site, introducing the opportunity to multiple people at one time.

“We feel good that our opportunity is growing,” says Craig Jerabeck, President and CEO. “It’s been a record year. We’ve had significant organic growth, which is unusual these days.”

5LINX has always prepared new representatives to succeed, but executives there are never satisfied with the status quo. With so much growth in representative ranks, they enhanced 5LINX University, which provides online training. For representatives who prefer to build knowledge in person, training events are frequent and numerous, including three international events a year plus regional events that run simultaneously in 16 cities. While they were beefing up training, 5LINX overhauled distributors’ personal websites and back offices. The clean, easy-to-navigate sites did more than make using them a pleasant, professional experience. The synergy with other key improvements even pumped up sales results.

“It increased product sales by 40 percent,” says Jeb Tyler, Executive Vice President of Marketing. “It was a combination of the momentum of the company, having the right products at the right time, the right compensation plan and the right leadership in place. That perfect mix has helped catapult us to record numbers of new customers and new representatives. Our investment in infrastructure and marketing is starting to pay huge dividends right now.”

Investing in Growth


5LINX: More Than a Name

When its founders created 5LINX, their goal was to build a truly better company with the best possible opportunity. Their foundation was five principles—five links—that still guide the company every day. 5LINX President and CEO Craig Jerabeck says that the principles are as important today as they were in 2000, when the company was created. He explains the central role they play at 5LINX.

Vision: “We’ve laid out a vision for our corporate and field teams so they have a clear picture of where we are taking this company and how they fit in the long term.”

Integrity: “It’s our most important value and it’s at the heart of every decision we make. We define it as doing what you say you’ll do.”

Opportunity: “We broadened the scope of our mission statement and product line to create an even more meaningful business opportunity. Everyone in our corporate office is compensated based on the success of our independent representatives.”

Freedom: “Our independent representatives typically work in their 5LINX businesses part time at night and on weekends. They can do their business wherever and whenever they choose. They can’t do that by working for a corporation. It gives them time freedom.”

Success: “People give us their blood, sweat and tears on a volunteer basis, so it’s critical that they can rely on us to give them the opportunity for success in our business without looking over their shoulder or wondering about the moral fiber of the management team.”

Jerabeck notes that 5LINX recently hired 46 new employees to keep up with its growth surge. In order to make certain that its culture is permeated throughout the staff, it ran a program to reinvigorate awareness of the principles. Jerabeck stresses that maintaining the corporate culture is supremely important to 5LINX’ success.

“Part of our onboarding process is teaching the culture that is based on our five core principles,” he says. “Every new employee learns how their job ties into the corporate values. They’re tightly woven throughout the organization.”


William Faucette Jr.
William Faucette Jr.

Those new representatives are sticking around longer, too, thanks to the robust product line and also to even more innovations in the company’s compensation plan. Last year the company enhanced compensation for its top leaders while giving new recruits a clearer career path and the opportunity for more income sooner. The effect was immediate, and it has continued.

“The impact has only continued to demonstrate that those moves were the right things to do,” explains William Faucette Jr., 5LINX Vice President of North American Sales. “We’ve had record growth for six of the past seven months. Those changes we implemented last year are truly taking hold. About 25 percent of people hit their first promotion in their first month. The biggest impact is the new Diamond position at the top. You always need something at the top for top leaders to run for. We should have people who reach that position this year.”

Faucette has special insight into what drives representatives. His 5LINX career began as one, while he kept his day job as Chief of Staff for the City of Rochester. He built one of 5LINX’ largest downlines, even as corporate execs periodically tried to lure him to join the staff. Finally, after more than eight years as a field leader, he joined the staff in January 2009.


“When I started to make a couple of thousand a month [as a representative], that’s when I started to believe that this could become a career. I want to reinforce that in people.”
—William Faucette, Jr., Vice President of North American Sales


“In my experience, when I started to make a couple of thousand a month, that’s when I started to believe that this could become a career. I want to reinforce that in people,” Faucette says. “I want to give people a chance to turn Plan B into Plan A.”

One of the ways he and other 5LINX staff members are enabling field leaders to make that transformation to full time is through the Platinum Pool, which is funded bit by bit every time a new representative or a customer affiliates with 5LINX. This January 5LINX divided the $1 million Platinum Pool among 11 people, issuing checks ranging from $30,000 to $120,000, based on 2011 efforts.

Results like those come from representatives who use every occasion to discuss the life-changing opportunity and services the company offers. 5LINX recently made it even easier for its representatives to do business on the run. It introduced the 5LINX Velocity™ tablet, which runs on the Android 4.0 operating system. The tablet comes preloaded with apps and YouTube videos that help representatives show the business opportunity, even if they aren’t accomplished presenters. It also lets them sign up new business partners or customers—all in a way that not-so-subtly demonstrates 5LINX’ commitment to providing top technology.

Moreover, the Velocity tablet is now the portable platform for 5LINX’ flagship videophone service. Gone are the days of carrying a separate device to make or demonstrate videophone calls. The multipurpose tablet is less bulky, more versatile, and affordable.

Even with such impressive credentials, services and technology, CEO Jerabeck is convinced that the company’s secret ingredient to 5LINX’ enviable growth is the cohesiveness of its sales and corporate leadership. The group gathers often, but once a year they meet to do strategic planning at both the corporate and field sales levels. The top 12 sales performers form the advisory council, meeting with corporate executives and the same facilitator each year. Jerabeck says that the group reached a whole new level at the planning session for 2012.

“After many years of doing this, I felt the most gratified ever,” he recalls. “There were 12 very strong, Type-A sales leaders in a room with the corporate team, and when we left that room, I knew we were all of one mind. It was a cohesive team, and we built our 2012 plan together. That meant we had matured as an organization, and we can now take this business anyplace.”

That solid management foundation has created strong, steady growth—the best indicator of the health of the organization, according to Jerabeck.

“Every month, we’re consistent and improving. We’re financially healthy,” he says. “We don’t have very big margins. Telecom and energy don’t lend themselves to that. But we have a sound balance sheet. We’re well-positioned for growth and sustainability. If there are economic or political storms, we’ll weather it because people rely on us to.”

Filed Under: Daily News

Miche Bags: A Bag With Buzz

July 2, 2012 by DSN Staff Leave a Comment


Click here to order the Direct Selling News issue in which this article appeared.


MICHE

Company Profile

  • Launched: 2005
  • Headquarters: South Jordan, Utah
  • CEO: Corbin Church
  • Products: Interchangeable purses and accessories
Quote

Ask any woman who has ever owned or encountered a Miche bag and she will tell you that it’s a bag with buzz. Women who carry Miche bags become walking advertisements for the product and its unique design. What makes it so unique? The fact that it offers the opportunity to change its outer design without having to change the bag’s contents. In literally seconds women can change their bag to match an outfit, choosing from hundreds of design possibilities.

Corbin Church
Corbin Church
Jennie Platt
Jennie Platt

The concept was the brainchild of Michelle Romero, who spilled something on her bag and was frustrated with the thought of searching for a replacement and transferring the contents—something that virtually all women can relate to. Necessity, as they say, is the mother of invention. Spurred by an immediate need, Romero had an idea: Why not create a bag with changeable covers?

She created a prototype out of glue and some scrap fabric and showed it to a friend, Annette Cavaness, an accessories buyer. Together they launched Miche Bag LLC in 2005. Pronounced MEE-chee, the name stems from Romero’s nickname. She later brought the concept to serial entrepreneurs Corbin Church and his partner Chris Seegmiller, and Romero is no longer actively involved in the day-to-day management of the business.

“My childhood friend approached me in early 2007 and said ‘I have a product for you to look at,’ ” recalls now-CEO Corbin Church, who joined the company in 2007, and up until the spring of 2012, worked out of his basement with 19 employees. Initially, when he learned the product was handbags his response was lukewarm, but he says, “He proceeded to explain that it was a very unique handbag and unlike anything else out there.” And, indeed, Church says it was a unique concept. “It had the characteristics of what I look for in a product.” To test the concept further, Church turned to some women who represented different demographics and asked for their input. “They absolutely went nuts over this product,” he says. “They couldn’t believe what they were seeing. It was that shock or ‘aha’ factor that everybody gets when they see this product.”

Jennie Platt is the Chief Design and Production Officer at Miche Bag, the woman behind the trendy and continually evolving designs that keep customers coming back for more. “From a design standpoint what we do is really unique in that we have found a way to really help women find a unique product,” she says. For Miche representatives, she notes, “It gives them an opportunity to create a lifestyle inexpensively that is still very fashionable and fun. It has been really amazing to create a product that has given the opportunity to so many women to find ways to either support their families or to create additional income, whether for vacation or travel or to send their kids to college.”

Despite its youth, Miche has already evolved significantly from its initial launch.


“It gives [representatives] an opportunity to create a lifestyle inexpensively that is still very fashionable and fun.”
—Jennie Platt, Chief Design and Production Officer


Early Marketing

Miche was not an overnight success—but it was close. Initially, Church sold the product through kiosks in malls, which provided the opportunity to demonstrate and explain the product.

“We opened the first kiosk in July 2007 and it exceeded our expectations by almost two and a half times,” says Church. “So right away, we got off to a good start, but we had the typical challenges of a new company.” Chief among these challenges was the economic downfall that hit its peak in 2008. “Malls became ghost towns, and it was a difficult time to try to be in a retail space to conduct business,” he says.

Faced with these challenges the company began to look at alternative sales channels. These included infomercials, home parties and web marketing.

Direct sales through home parties proved to be an important part of the mix for Miche, recalls Church. “Our home party business began to grow, and grow fairly dramatically,” he says. “So we started to embrace that, but we didn’t turn away from some of those other channels. We still had carts going, we still had the infomercial going, web was a big channel for us, retail was still a big channel for us—but home parties started to dominate our business, so our focus became home parties.”

By the fall of 2008, 80 percent of the firm’s revenue was being generated through direct sales. “We were seeing dramatic sales growth,” says Church. The company did about $200,000 in sales in 2007; in 2008, about $7 million; in 2009, $30 million; and, he says, this year they expect to approach $100 million.


The company did about $200,000 in sales in 2007; in 2008, about $7 million; in 2009, $30 million; and this year they expect to approach $100 million.


Secrets to Success

MICHE

Why such significant success? “This is a big question,” says Church, who points to a few keys. First, the product. “Unlike other sales companies, our product is a walking billboard,” he says. “If you have a Miche handbag and somebody walks up to you—a total stranger—and says, ‘oh, that’s a cute bag,’ you don’t turn to her and just say ‘thank you.’ You say, ‘This is one of those really cool Miche bags.’

“You can carry any other bag and it’s just a great bag. It could be a Michael Kors or a Gucci and you make whatever statement you make. But there’s only one bag that makes a statement on its own, and that’s Miche.” The nature of the product itself is what has contributed to the company’s success, says Church. “It’s really been phenomenal for us. We are so unique. That puts us in this category pretty much all by ourselves. We’re pretty much all alone in the exchangeable handbag business.”

The other element of the company’s success, says Church, is an element of direct sales. “We change people’s lives,” he says. “Our business is very fun. The fun factor with us is very apparent—the fact that you’re in the fashion industry, in fashion accessories.” He says Miche is not a fad. “So many people have asked, ‘How have you kept this fresh and exciting?’ We constantly change our products and we are adding new styles every single month, which is a mammoth task.”

Over time, the demand for Miche has fueled continued growth, new designs and related accessories. Base bags are now available in six styles and range from the petite to the prima and demi. Base bags come in black or brown and some styles also offer interchangeable handles. An increasingly wide range of shells for the bags is continually updated and augmented with new styles and designs. Shells are attached to the bag with magnets. The product line also has been augmented with the non-interchangeable hip bags, wallets, coin purses, closet organizers, a purse organizer and bag charmers—key ring-like accessories that can be attached to the bags’ handles. The bags and accessories, says Church, are “an affordable luxury” for women.

Paying It Forward

BAGS

In addition to pride over the impact that Miche has on the lives of its representatives, Church says that contributing in bigger ways is also important to the company.

Church lost his father to cancer in 2007, just two months before starting the business, he says. Cancer became a very personal issue for him. “I wanted to kill cancer,” he says. So, cancer has become the cause that Miche focuses on. And, in keeping with its product line, the focus has a direct tie-in with its products.


“In the past two years … more than $2 million has been donated to cancer research from a very young, very small company.”
—Corbin Church, CEO


Platt designed a shell that has become known as the “Hope shell.” The shell incorporates quotes from people who have been impacted by cancer. All of the profits from the sale of this shell, says Church, are donated to cancer research. “In the past two years that has amounted to more than $2 million being donated to cancer research from a very young, very small company. It has turned into an amazing program.”

The company provides opportunities for employees to make a personal impact on others’ lives as well. Miche does a humanitarian trip each year as a company and “everybody is invited,” says Church. Last year the company went to Peru for a week to provide basic education on hygiene at an orphanage. “We brought the children gifts and became part of their lives for a week,” he says. They also brought electricity to a wing of the orphanage. This year in June the company will spend a week in Ghana putting the finishing touches on a school dedicated to one village. “We’ve learned that these things are so important to show heart and meaning for a company.”

Finding Focus

As Miche focuses its efforts on making a difference in the lives of its staff, its representatives and people around the world, it is also finding focus in its approach to creating a sustainable business model for the future.

Over time Miche had developed multiple channels of sales and distribution—retail sellers, national distributors, and independent representatives of two types—those who purchased through a distributor and those who carried their own inventory. The multiple channels created overlap and competition, though. That, and the obvious potential afforded through Miche parties, prompted the recent change, which is being phased in as retail outlets and distributors are phased out.

In August 2011, Miche Bag announced a new business model that launched it firmly into the direct sales industry. Miche Parties now provide thousands of representatives around the world to reach out and personally connect with women who have quickly become enthralled with a simple idea—purses that can be transformed in seconds through interchangeable shells in a wide array of colors and styles.


In August 2011, Miche Bag announced a new business model that launched it firmly into the direct sales industry.


“We became a full-fledged party company on Feb. 1 this year,” says Church. “There were a lot of questions about who and what we were as a company because we were in so many different channels. We decided that since party plans represented over 80 percent of our revenues that we needed to become a true party plan company and provide our representatives with the growth opportunities and the resources they need to succeed.”

To support this shift, he says, retail has been entirely cut out of the mix, and he admits this wasn’t a very popular move. “We had a number of distributors that were selling our products around the country. The representatives that formed our company were representatives under these 300 distributors. That was a very difficult decision to figure out how to give these representatives what they needed to grow and flourish, yet take care of those distributors. We built in programs so that everybody could be happy.” But, he adds: “Is everybody happy? No. But I think we found a good balance in getting the company to where it needed to be.”

And it was a move supported by the company’s sources of demand for its products. “The end result is a company that is more appealing to a broader group,” says Church. With the change, Miche is shifting focus to its representatives exclusively, he says. “We brought on a software system that gives our representatives all of the tools that they need to be successful, and an income opportunity they had never seen before.” Previously, he says, representatives could earn a commission on their sales, but now they have the opportunity to build and support a team to enhance their income opportunities. “That’s a huge development for our company in the last three months,” he says.

Early results suggest the shift has been a wise one. “It’s exciting to report that our company is 25 percent ahead of its projections,” says Church. “We’re growing more than we expected and it is very exciting.”

A Bright Future

Jayma Woods
Jayma Woods

Church says the company at 5 years old is still poised to present tremendous opportunities for its very newest representatives. “Most people still have not heard of a Miche bag,” he notes. “There is a lot of opportunity yet—not to mention that the customers we bring on stay very, very loyal to us.”

The future holds opportunity and innovation as Miche continues to focus on what matters most—its customers. “We spend so much time doing trend analysis and research, not only from a marketing perspective but also from a customer perspective,” says Chief Design and Production Officer Platt. “It’s very important to us to really understand who our customer is, what she wants and what her needs are.”

Jayma Woods, Executive Vice President, Domestic Distribution, agrees. “Providing this unique experience is unlike anything I have ever been involved with in retail before. As we’ve made this transition to a true direct sales model we have really seen how impactful it can be in somebody’s life. To be a part of that has been an honor for us.”

Filed Under: Feature Articles

Letter from John Fleming, July 2012

July 2, 2012 by DSN Staff Leave a Comment

John FlemingThose of us who attend the DSA Annual Meeting every year always find something that serves to inspire us about the promise of the future. This is one of the most basic motivations for attending, along with that once-a-year opportunity to interact with those we know have a common interest in entrepreneurship through the direct selling model. We have already posted highlights on our website, and our article in this issue will provide you with a closer and personal overview of the meeting.

Having attended many DSA Annual Banquets over the years, this one will certainly be remembered as historic! The banquet was truly one of the great moments in time, in terms of the growth and evolution of the direct selling industry. To have been there meant witnessing greatness in leadership, which was displayed in person by Rich DeVos, Co-Founder of Amway, who came to the stage to honor the induction of his two sons Dick DeVos and Doug DeVos into the DSA Hall of Fame. Most memorable was the story told by Rich DeVos of the evolution of a company, Amway, but also the growth, challenges and ultimate victories won by both Amway and the industry. Having had the opportunity to listen to Rich DeVos speak about the attributes of the direct selling model over several decades, it was somewhat amazing to listen to this icon reflect again on the basic principles of free enterprise and the importance of direct selling as an opportunity around the world.

An Investor Forum/Press Conference was introduced into this year’s DSA Annual Meeting format and should pave the way for more such events that will serve to provide and explain the statistical performance of the industry, including points of view by those who study the business model. DSA CEO Joe Mariano led the information sharing and facilitated a great panel discussion. The panelists represented both a perspective on publicly held companies and the interest of private equity investment. In my many years of attending DSA meetings, this was a first and much welcomed session. Such information-sharing events are critical to the future success of the direct selling way of doing business, because we are constantly challenged by the opinions—often ridiculous opinions—of those who simply “do not know,” yet are clearly heard.

As we now set the editorial calendar for the balance of the year, one topic has been added that would not have been on our radar two months ago. Since the question and misunderstanding about the role personal consumption plays in the context of the direct selling model has surfaced, we will be addressing this topic in a cover story scheduled for next month. We will approach the story first as a research project. After we collect the input from those interviewed, we will write the story needed to define this issue as it should be defined.

When we think about the huge investment being made in customer loyalty programs by every brand you can think of, direct selling companies have always had a built-in mechanism that encourages enrollment. The benefit of being able to purchase at wholesale prices while contemplating the opportunity to share the product or service with others is a unique competitive advantage. Regardless of whether one builds a business or not, the opportunity to gain access to products/services at discounted prices will always be a draw and one of the key reasons people join a particular company. Direct selling companies offer the most unusual, limited risk, free-enterprise opportunities offered in the marketplace. Some earn and earn well—about 15 percent to 20 percent on average—but all gain access to the products, services and benefits they were attracted to at prices that are less than suggested retail. This sounds like the essence of a good customer loyalty program, and in many ways, it is. More to come next month!

Visitation to our website dsnsite.wpengine.com has increased dramatically over the past two months, and we appreciate the comments received. We welcome those of you who are finding the web format to be an easy way to catch headlines and also access the complete DSN issue. We have received many comments about the ease of finding articles in previous issues, so we encourage you to share the site address with colleagues. It’s an excellent source of positive journalism on the industry and the many companies we write about. When we introduced the new website we did so with a goal of being visited by more than 100,000 industry decision makers and observers each month within the first year. Based on the number of visitors we experienced in April (approx. 67,000) we are on our way toward achieving the first goal and helping you spread the positive message about the impact the business model makes on the lives of people throughout the world.

Until next month …

John Fleming
Publisher and Editor in Chief

Filed Under: From the Publisher

July 2012

July 2, 2012 by DSN Staff Leave a Comment

Blyth Inc.

Robert B. Goergen Jr.
Robert B. Goergen Jr.
Brett M. Johnson
Brett M. Johnson
Jane A. Dietze
Jane A. Dietze

Blyth Inc., a designer and marketer of candles, accessories for the home and wellness products, announced that its Board of Directors unanimously approved the appointment of Robert B. Goergen Jr., who will continue in his capacity as President, PartyLite Worldwide, indefinitely. Goergen was appointed to his position in January 2012 and had previously served as President of Blyth’s Multi-Channel Group since 2006. An external search for a permanent successor has been discontinued.

Also announced was the election of Brett M. Johnson and Jane A. Dietze to the Board of Directors.

Johnson is CEO and President of Forward Industries Inc., a NASDAQ-listed company that designs, markets and distributes soft-sided carrying cases and electronic accessories for the handheld consumer electronic and medical industry.

He founded Benevolent Capital Partners, which is a diversified holding company with investments in real estate, real estate services, manufacturing, branded consumer products and eco-conscious businesses.

Dietze is Director of Private Equity and Bowdoin College’s Investments Office. Prior to joining Bowdoin College she was a Managing Director at Fortress Investment Group, a global alternative investment and asset management firm, as well as general partner in a number of investment management positions. She is currently involved with Half the Sky Foundation, a nonprofit organization nurturing China’s orphaned children.

Blyth Inc., headquartered in Greenwich, Conn., is a multi-channel company primarily focused on direct selling, offering its products through PartyLite and ViSalus.


AL International

Dave Briskie
Dave Briskie
Steve Hess
Steve Hess

AL International, a global direct marketer of lifestyle and nutritional products and services and gourmet coffee, has appointed Dave Briskie as Chief Financial Officer. Briskie will also continue to serve in his current roles as the company’s President of Commercial Development and as a member of its Board of Directors.

Briskie formerly served as CEO of Javalution Coffee Company until its merger with AL International last year and is currently the Chairman of AL International’s audit committee. Prior to joining Javalution in 2007, he was CEO of Drew Pearson Marketing Inc. (DPM), a designer and manufacturer of licensed, private label and fashion headwear whose clients included Fortune 500® companies.

Also announced was the appointment of Steve Hess, expert in human performance training, to the Athletic Advisory Board of Youngevity® Essential Life Sciences, a wholly owned subsidiary of AL International.

Steve Hess is in his 12th season as the assistant coach, strength and conditioning, for the NBA’s Denver Nuggets basketball team. Hess becomes the 10th member of Youngevity’s Athletic Advisory Board, which comprises other experts in athletics and nutrition.

Hess is part owner of FORZA, a fitness and performance center, and is one of 10 trainers worldwide who sits on the Under Armour training council. In addition, Hess has had much television experience and has been featured on NBA Inside Stuff and on The Eating Network. He also has his own workout segment on the Altitude Sports and Entertainment Network.


Avon Products Inc.

Avon Products Inc. announced that its Board of Directors elected Douglas R. Conant to the Board, effective immediately.

Conant is the retired President and CEO of the Campbell Soup Company, where he served from 2001 to 2011 and led the company through a dramatic business transformation that generated quality sales growth, 10 consecutive years of adjusted earnings per share growth, strong cash flow and record returns on invested capital. Conant currently serves as the CEO of DRC LLC, a leadership consulting firm, which he founded in August 2011.

Avon, the company for women, is a leading global beauty company, with over $11 billion in annual revenue.


Stella & Dot

Jeff Harris
Jeff Harris

Stella & Dot announced that Jeff Harris, a veteran finance executive, has been named Chief Financial Officer. Harris will oversee all aspects of finance and accounting at Stella & Dot, and play a critical role in the global expansion of the brand.

Prior to joining Stella & Dot, Harris was CFO at children’s clothing retailer The Gymboree Corp., where he also previously served as Vice President of Finance. Harris brings a diverse background of finance skills in consumer packaged goods and retail industries from both public and private businesses. Harris has also held financial leadership positions at Tribune Co., The Walt Disney Co. and at Lucasfilm.

Stella & Dot is a boutique-style jewelry and accessories company. Stella & Dot offers its on-trend product line exclusively through a growing network of trained independent consultants (stylists) across North America and most recently abroad in the UK.


USANA Health Sciences Inc.

Dr. John Cuomo
Dr. John Cuomo
Dr. Brian Dixon
Dr. Brian Dixon
Dr. Nancy Steely
Dr. Nancy Steely
Dr. Mark Levy
Dr. Mark Levy
John Bosse
John Bosse

USANA Health Sciences Inc., a global nutritional supplement company, announced the promotion of Dr. John Cuomo to Executive Director of Global Research and Development, and Dr. Brian Dixon, Ph.D., to Executive Director of New Product and Technological Innovation. Additionally, Dr. Nancy Steely, Mark Levy, Ph.D. and John Bosse have joined USANA.

Dr. Cuomo will be involved in the building of a USANA research and development laboratory in Singapore, and he will continue to work on the company’s expansion into China. He holds more than 20 U.S. and European patents, is the author of numerous scientific papers, and brings decades of expertise to USANA’s research and development team in the areas of synthetic organic chemistry, manufacturing and analytical methods.

Dr. Dixon will take on additional responsibilities in new product development, clinical research and technology innovation. He has done research in molecular and cellular biology, focusing on the underlying biochemical and cellular mechanisms of aging, at Oregon State University’s Linus Pauling Institute, where he earned his Ph.D.

A licensed naturopathic physician, Dr. Steely has been a holistic healthcare practitioner since 2000. She has joined USANA as a senior scientist who will be involved in all aspects of product development with a focus on formulations.

Dr. Levy has a background in human nutrition, nutritional sciences, food science and biology. His primary role as a senior scientist is to research, test and innovate nutritional compounds for their efficacy in promoting long-term human health.

Bosse is a registered dietitian and NSCA Certified Personal Trainer who specializes in sports nutrition. He has taken on the role as senior scientist for product innovation and is involved in research and development of new products and technologies.

USANA Health Sciences Inc. develops and manufactures high-quality nutritionals, personal care, energy and weight-management products that are sold directly to preferred customers and associates in 18 markets worldwide.


Council for Responsible Nutrition-International

John Venardos
John Venardos
Carl Hastings
Carl Hastings

The Council for Responsible Nutrition-International (CRN-I) announced new Board officers. Direct selling executives have been included among them. John Venardos, Senior Vice President, Worldwide Regulatory, Government & Industry Affairs for Herbalife, has been elected Chairman of the Council. Tyler Whitehead, Vice President and General Counsel at Nu Skin, has been elected Vice Chairman, and Carl Hastings, Chief Scientific Officer and Vice Chairman of Relìv, has been elected Treasurer of the Board.

The officers were elected at the annual CRN-I members meeting recently held in Washington, D.C., and they will serve two-year terms.

CRN-I was formed in February 2010 to provide science-based information to regulators, healthcare professionals and the media—particularly those outside the United States, supporting the safety and benefit of dietary ingredients and dietary/food supplements—and to promote sound nutrition and food safety policies well-grounded in science.

CRN-I is an international arm of the U.S.-based Council for Responsible Nutrition, the leading trade association for the dietary supplement industry.


Mía Mariú

Melba Ríos
Melba Ríos

Mía Mariú has announced that Melba Ríos has joined the company as Vice President of Sales for the Hispanic market. Her primary responsibilities will be to manage all aspects of salesforce development, which include adviser recruitment, leadership skills, sales training, brand sales growth and the overall guidance of Spanish-speaking sales advisers. Her responsibility encompasses local market support for sponsorship efforts in key Hispanic markets. Ríos will also supervise marketing programs, with a special focus on adviser incentive and recognition programs as well as internal and external communications.

Ríos has more than 30 years of direct selling management experience in U.S. Hispanic product sales. Prior to joining Mía Mariú, she held executive positions in other direct selling companies and was responsible for consumer sales and marketing, as well as communications, training and recognition programs for the Spanish-speaking salesforce.

Mía Mariú, based in Dallas, is a health and beauty company that sells botanical skin care, mineral cosmetics, natural health supplements and fragrances.

Filed Under: Daily News

Financial News, July 2012

July 2, 2012 by DSN Staff Leave a Comment

Nu Skin Enterprises Inc.

Nu Skin Enterprises Inc. (NUS—NYSE) announced record first quarter results with revenue of $462.0 million, a 17 percent improvement over the prior-year period. Revenue was positively impacted 1 percent from foreign currency fluctuations. Earnings per share for the quarter were 74 cents, compared to 24 cents in the prior year, or 56 cents when excluding first quarter 2011 charges related to a Japan customs ruling.

First quarter revenue in North Asia was $182.2 million, compared to $179.4 million for the same period in 2011. First quarter revenue in Greater China increased 35 percent to $92.6 million, compared to $68.6 million in the prior-year period. Revenue in South Asia/Pacific was $77.3 million, a 55 percent improvement compared to the prior year. The Americas improved 19 percent to $66.3 million, compared to $55.9 million in the prior-year period, including a 14 percent revenue increase in the United States. Revenue in Europe was $43.5 million, a 4 percent improvement over the prior-year period.

The company’s operating margin was 15.5 percent for the quarter, compared to 6.3 percent for the prior-year period, or 14.6 percent when excluding charges related to the Japan customs ruling. Gross margin during the quarter was 83.6 percent, compared to 74.6 percent, or 82.8 percent when excluding the Japan customs expenses.

Nu Skin announced that its board of directors has authorized a $250 million extension to the company’s ongoing share repurchase authorization. The newly authorized funds will be used to repurchase company stock on the open market. The $250 million share repurchase authorization adds to the approximately $80 million remaining from the prior authorizations as of March 31, 2012.

The board of directors has also declared a quarterly dividend of 20 cents per share, which was payable on June 13, 2012, to stockholders of record on May 25, 2012.

Nu Skin Enterprises Inc. demonstrates its tradition of innovation through its comprehensive anti-aging product portfolio, independent business opportunity and corporate social responsibility initiatives.


USANA Health Sciences Inc.

USANA Health Sciences Inc. (USNA—NASDAQ) announced financial results for its fiscal first quarter ended March 31, 2012.

Net sales for the first quarter of 2012 increased by 7.4 percent to $154.1 million, compared with $143.6 million in the prior-year period. The growth in net sales was driven by the company’s Asia Pacific region and was partially offset by a modest decline in the North America region.

Net earnings for the first quarter increased to $13.8 million, or 21.2 percent, compared with the prior-year period. Earnings per share for the quarter increased 28.6 percent to 90 cents, compared with 70 cents in the first quarter of the prior year. The improvement in earnings per share resulted from higher net earnings and a lower number of diluted shares outstanding due to the company’s share repurchases in 2011.

Net sales in the Asia Pacific region increased by 14.3 percent to $95.5 million, compared with $83.5 million for the first quarter of the prior year.

During the first quarter of 2012, net sales in the North America region decreased 2.3 percent to $58.6 million, compared with the first quarter of the prior year.

USANA develops and manufactures high-quality nutritional, personal-care and weight-management products that are sold directly to associates and preferred customers in 18 markets worldwide.


Avon Products Inc.

Avon Products Inc. (AVP—NYSE) reported first quarter 2012 results.

Total revenue of $2.6 billion decreased 2 percent, up 1 percent in constant dollars. First quarter 2012 gross margin was 60.8 percent, 310 basis points lower than the prior-year quarter, primarily due to cost pressures, including commodities and higher labor costs, as well as the negative impact from both foreign exchange and product mix.

In the quarter, the company took actions to enhance its operating model, reduce costs and improve efficiencies. It recorded costs associated with restructuring of $27 million pre-tax, up from $15 million pre-tax in the year-ago period, or 4 cents and 2 cents per diluted share, respectively. Of the $27 million in the quarter, $22 million relates to the actions as described above, with the remaining $5 million associated with the 2005 and 2009 restructuring programs.

Operating profit was $72 million in the quarter and operating margin was 2.8 percent. Adjusted non-GAAP operating profit was $99 million and adjusted non-GAAP operating margin was 3.8 percent, down 610 basis points from the first quarter of 2011.

Income from continuing operations in the first quarter of 2012 was $28 million, or 6 cents per diluted share. Adjusted non-GAAP income from continuing operations was $46 million, or 10 cents per diluted share.

In Latin America first quarter 2012 revenue was up 1 percent year over year, or up 5 percent in constant dollars with strong momentum continuing in Mexico, which was up 2 percent, or up 10 percent in constant dollars. Venezuela grew 26 percent in both reported and constant dollars.

Q4 revenue in Avon’s core U.S. business (which excludes Silpada) was down 2 percent. Silpada sales declined 17 percent.

In Central and Eastern Europe first quarter revenue was down 4 percent or in constant dollars was flat. In Western Europe, Middle East and Africa, revenue in the U.K. and Continental Europe was down 5 percent, or down 1 percent in constant dollars, and Asia Pacific’s revenue was down 2 percent year over year, or 4 percent in constant dollars.

Avon also declared a regular quarterly dividend on its common stock of 23 cents per share, payable June 1, 2012, to shareholders of record on May 17, 2012.

Avon, the company for women, is a leading global beauty company, with over $11 billion in annual revenue. As the world’s largest direct seller, Avon markets to women in more than 100 countries through approximately 6.4 million active independent Avon sales representatives.


Tupperware Brands Corp.

Tupperware Brands Corp. (TUP—NYSE) reported first quarter 2012 sales and profit, with sales up slightly in dollars and 3 percent in local currency. The first quarter sales comparison versus last year was impacted by one less week in the quarter that overall had an estimated 5 percentage point negative impact on the local currency sales comparison, and impacts on the segment comparisons of 4 to 8 percentage points.

GAAP net income for the quarter was $58.3 million, or $1.02 per diluted share, compared with 2011 first quarter GAAP net income and E.P.S. of $55.8 million and 88 cents per share, respectively. Adjusted diluted earnings per share of $1.03 in the quarter were 13 cents, or 14 percent, better than 2011 in U.S. dollars, including a negative foreign currency impact of 6 cents. Excluding the impact of foreign exchange on the comparison, adjusted diluted earnings per share were up 19 cents, or 23 percent.

According to Chairman and CEO Rick Goings, emerging markets generated 59 percent of sales in the first quarter and were up 4 percent in dollars and 8 percent in local currency, while established markets were down 3 percent.

In the first quarter of 2012 the company repurchased for $50 million in the open market 819,000 shares, or 1.5 percent of 2011 year-end outstanding shares. Since 2007, the company has repurchased 13 million shares for $678 million and can repurchase up to an additional $522 million of shares under its current authorization that runs until Feb. 1, 2015. The company expects to repurchase $25 million worth of shares in the second quarter of 2012.

Tupperware also announced that its board of directors declared the company’s regular quarterly dividend of 36 cents per share, payable on July 6, 2012, to shareholders of record as of June 20, 2012.

Tupperware Brands Corp. is a portfolio of global direct selling companies, selling innovative, premium products across multiple brands and categories through an independent salesforce of 2.7 million.


Herbalife Ltd.

On May 2, 2012 Herbalife Ltd. (HLF—NYSE) entered into an agreement with Merrill Lynch International to repurchase $427.9 million of Herbalife’s common shares. This will complete its current $1 billion buyback authorization.

Under the terms of the repurchase agreement, Herbalife paid $427.9 million on May 4, 2012, from the company’s cash on hand and from borrowings under the company’s senior secured revolving credit facility, and will receive a portion of the shares on a predetermined date and the remainder upon completion of the program.

The total number of shares ultimately repurchased under the agreement will be determined based generally upon the volume-weighted average share price over the course of the program. The transaction is currently expected to be completed no later than July 2012. Shares that are repurchased will be retired.

Herbalife just reported its best quarter in its 32-year history. The company executed this share repurchase agreement because it believes its share price is currently undervalued.

Herbalife Ltd. is a global nutrition company that sells weight-management, nutritional and personal-care products intended to support a healthy lifestyle. Herbalife products are sold in 81 countries through a network of independent distributors.


Primerica Inc.

Primerica Inc. (PRI—NYSE), the largest independent financial services marketing company in North America, announced that it has closed a redundant reserve financing transaction. Peach Re Inc., a special purpose financial captive insurance company and indirect wholly owned subsidiary of the company, entered into an approximately 14-year letter of credit facility with Deutsche Bank AG New York Branch for a maximum amount of $510 million to support certain obligations of Peach Re for a portion of reserves (commonly referred to as Regulation XXX reserves) related to level premium term life insurance policies reinsured by Peach Re from Primerica Life under a new coinsurance agreement. In connection with the transaction, Primerica Life obtained regulatory approval for the payment of an extraordinary dividend of $150 million to Primerica Inc. Had the transaction occurred as of Dec. 31, 2011, and giving effect to payment of the extraordinary dividend and the redundant reserve transaction, Primerica Life’s statutory risk-based capital (RBC) ratio would have been in excess of 540 percent.

As a result Primerica Inc. has entered into an agreement to repurchase 5,736,137 shares of Primerica common stock beneficially owned by Warburg Pincus Private Equity X L.P. and Warburg Pincus X Partners L.P. at a purchase price of $26.15 per share. The purchase price was determined based on the closing price of Primerica common stock on April 17, 2012. Following the repurchase transaction, Warburg will own approximately 17.9 percent of Primerica’s outstanding common stock on a primary basis, and approximately 23.2 percent including the warrants to purchase Primerica common stock currently held by Warburg Pincus.

Primerica Inc., headquartered in Duluth, Ga., is a distributor of financial products to middle-income families in North America.


Just Energy Group Inc.

ClimeCo America Corp. and Rentech Nitrogen Partners L.P. (RNF—NYSE) jointly announced that ClimeCo America will deliver 120,000 Climate Reserve Tonnes (CRT) to Just Energy (JE—NYSE and JE—TSX), a competitive North American green energy retailer and the parent company of direct seller Momentis. Measured as a unit of offset credits used by the Climate Action Reserve (CAR), one CRT is equal to one metric ton of greenhouse gases reduced or sequestered. The carbon credits will be delivered to Just Energy by ClimeCo America over a five-year period.

The carbon credits will be generated by Rentech Nitrogen as part of North America’s first voluntary tertiary nitrous oxide (N2O) abatement system constructed at the plant in East Dubuque, Ill., in the summer of 2011 under the leadership of ClimeCo America and Rentech Nitrogen. Nitrous oxide has a Global Warming Potential (GWP) of 310 versus carbon dioxide, with a GWP of one. Every ton of N2O destroyed by Rentech Nitrogen’s abatement system generates 310 tons of carbon dioxide equivalent credits (carbon credits).

Just Energy will incorporate the carbon credits as part of their carbon offset programs for residential and commercial customers. The company offers green energy solutions through their JustGreen™ and JustClean™ programs that enable customers to offset up to 100 percent of the emissions associated with their everyday energy use through carbon offsets as well as renewable energy projects.

In related news Just Energy filed notice with the Toronto Stock Exchange and the New York Stock Exchange announcing its April dividend. A dividend of CAN$0.10333/common share (CAN$1.24 annually) was payable on April 30, 2012, to shareholders of record at the close of business on April 16, 2012. This dividend is designated as an “eligible dividend” for Canadian income tax purposes. The common shares trade on the Toronto Stock Exchange and the New York Stock Exchange under the symbol JE.

Just Energy also reports that as of March 31, 2012, the conversion price for each CAN$1,000 of its outstanding 6 percent convertible unsecured subordinated debenture issued on Oct. 2, 2007, has been adjusted in accordance with the Trust Indenture dated Oct. 2, 2007, as supplemented from time to time, to CAN$29.33 convertible into 34.09 common shares of Just Energy Group Inc.

Just Energy is a competitive North American retailer of natural gas, electricity and green energy. Established in 1997 and with regional offices across Canada and the United States, Just Energy serves 1.8 million residential and commercial customers through a wide range of energy programs and home comfort services.


Blyth Inc.

Blyth Inc. (BTH—NYSE) reported earnings for the first quarter. Net Sales for the three months ended March 31, 2012 increased 56 percent to $283.1 million versus $181.0 million for the comparable prior year period primarily due to significant year-over-year sales growth at ViSalus. International sales represented 29 percent of first quarter sales this year compared to 49 percent last year, driven by ViSalus’ strong domestic sales growth.

Operating Profit for the first quarter was $19.6 million this year versus $3.3 million last year and includes a pre-tax ViSalus equity incentive charge of $2.9 million this year and $2.2 million last year. The company also incurred pre-tax restructuring charges of $1.1 million for PartyLite this year. Excluding the impact of these charges, operating profit would have been $23.7 million this year versus $5.5 million last year.

Net Earnings for the first quarter were $7.5 million compared to a loss of $1.0 million for the prior year. Diluted earnings per share for the first quarter were 87 cents this year compared to a loss of 12 cents last year. Normalized earnings per share before ViSalus’ equity incentive charges, PartyLite restructuring and discontinued operations were $1.10 this year versus 18 cents in last year’s comparable quarter.

In the Direct Selling segment, first quarter net sales increased 82 percent to $236.4 million versus $130.1 million for the same period last year due to significant sales growth at ViSalus.

Sales at ViSalus were $136.7 million in this year’s first quarter versus $20.0 million for the same period last year.

Total PartyLite sales for the first quarter declined 11 percent to $101.4 million from $113.6 million last year. PartyLite’s European sales declined 9 percent in local currency, translating into a decline of 13 percent in U.S. dollars. PartyLite’s U.S. sales declined 6 percent versus the prior year period. In PartyLite Canada, sales declined 15 percent in U.S. dollars during the quarter.

First quarter operating profit in the Direct Selling segment was $21.1 million versus $3.8 million in the same period last year. Excluding the aforementioned $2.9 million ViSalus equity incentive charge this year and $2.2 million last year, as well as the PartyLite restructuring charge of $1.1 million this year, the segment’s first quarter operating profit would have been $25.1 million this year versus $6.0 million last year. Strong sales and profit growth at ViSalus more than offset lower sales and profits at PartyLite versus last year.

Blyth, Inc., headquartered in Greenwich, Conn., is a multi-channel company primarily focused on direct selling, offering its products directly to the consumer through PartyLite and ViSalus.


Educational Development Corp.

Educational Development Corp. (EDUC—NASDAQ) announced their quarterly cash dividend.

The Board of Directors has authorized a 12 cents per share cash dividend. The dividend was payable on March 16, 2012, to shareholders of record March 9, 2012.

Educational Development Corp. sells children’s books, including Usborne Books and the Kane/Miller line of international children’s titles through a multi-level sales organization of independent consultants, through 5,000 retail stores and over the Internet.


Direct Selling News has accumulated this information from public sources, including press releases and SEC filings. The information is presumed accurate and reliable. However, it is not an endorsement of any investment opportunity. Proper and considerable due diligence should be completed before making any investment.

Filed Under: Financial

Compensation Plan Essentials

July 2, 2012 by DSN Staff Leave a Comment


Click here to order the Direct Selling News issue in which this article appeared.


A good compensation plan is one of the most important ingredients in the recipe for direct selling success, but what makes a compensation plan good?

What are the 12 key behaviors that all direct selling compensation plans should motivate and reward? These are very important. You can use the list provided in this article to view your compensation plan through the lens of an expert plan designer.

Your compensation plan should include qualifications to measure performance and compensation to reward meeting specific goals. Discover or review the most common components of each. All compensation plans have similarities but there are also fundamental differences.

Just like other things in life, it’s easy to make mistakes. Some kinds of mistakes have minor consequences. Compensation plan mistakes can have significant impacts on your company’s growth and health. Put your plan to the test by reading carefully the eight most common compensation plan design mistakes. At the end, you’ll find a short list of the conditions that indicate it may be time to repair or replace a compensation plan.

What Is a Good Compensation Plan?

A good compensation plan is one that financially and ethically fits your business while motivating and rewarding the 12 key behaviors you seek from your salesforce.

It should be designed with consideration of the products or services you are selling, the consumption patterns of the products or services, the margins for your products, your budget for field compensation, your overhead costs, and the targeted profitability of your company.

As compensation plans raise ethical issues, your compensation plan should also be designed with consideration for your tolerance of inactivity and the consequences of not staying ahead of others who were recruited directly or indirectly by a representative.

What Are the 12 Key Behaviors?

Compensation plans should encourage and reward specific behaviors. In all, there are 12 of them:

  1. Personally purchasing your products or services
  2. Selling to customers (nonparticipants of the income opportunity)
  3. Introducing the income opportunity to others (sponsoring/ recruiting)
  4. Building a team
  5. Training, supporting and nurturing others
  6. Becoming a leader
  7. Personally developing leaders
  8. Helping other leaders to develop leaders
  9. Meeting or exceeding minimum activity requirements
  10. Being promoted to a higher title or rank
  11. Meeting or exceeding title maintenance requirements
  12. Staying active and engaged in the business (retention)

In your compensation plan, each behavior should be rewarded by one or more types of compensation. Whenever possible, eliminate or minimize paying more than once for the same behavior.

Measuring and Rewarding Performance

Direct selling compensation plans are built with two sets of components. The first are qualification requirements and the second are compensation types.

Qualification Requirements

Only qualified representatives should be eligible to earn compensation. The most common components for qualification requirements are listed below:

  • Recognition titles
  • Promotion and maintenance requirements for each title
  • Personal sales volume
  • Group, team or side sales volume
  • Downline sales volume
  • Counts of qualified personally enrolled or sponsored representatives
  • Counts of qualified group or team members

For each title or position in your compensation plan, there should be a unique set of requirements. If you have positions in your plan that are too difficult to achieve relative to the previous position, you may have trouble retaining your best performers, many of whom will seek to advance themselves to increase their income.

Compensation Types

Independent representatives may be paid:

  • Retail profit on the personal sales of products or services to customers
  • Commissions based on personal sales volume
  • Bonuses based on the sales volumes of independent representatives’ directly or indirectly recruited representatives
  • Bonuses based on other achievements, such as personal title promotion or the title promotions of others
  • Fast-start bonuses on specific purchases or upon the personal sales volumes generated by new representatives within a specific period of time
  • Pool shares, which are paid to qualified participants

Eight Common Situations to Avoid

Having designed and improved compensation plans for many years, I have observed that in order to be great, you should avoid the eight. Below are eight situations to be aware of:

  • Too High Title Qualifications
    In setting the requirements to promote to higher titles, sometimes companies don’t realize that the performance bars they are setting are way too difficult. Most often, when this happens, it is evident in the requirements to promote to the second title in your compensation plan.
  • Too Low Title Qualifications
    Less often, companies establish title promotion requirements that are too easy. They reward mediocre performance over a period of time instead of rewarding the building of strong teams.
  • Insufficient Recognition
    When goals are met, independent representatives should be recognized for their achievements. Most often, recognition includes advancement in title. From time to time, we see companies whose compensation plans have just a few titles or none at all.
  • Overly Optimistic Expectations
    Everyone loves optimistic people. Well, most everyone does! It’s good to be optimistic, but it’s so much better to be realistic when it comes to salesforce performance. If your plan is built assuming everyone who joins will be a star, your rosy expectations will disappoint you and your salesforce.
  • Insufficient Rewards to Recruit Others
    Direct selling companies depend on recruiting for growth. If your compensation plan doesn’t sufficiently motivate and reward recruiting, you won’t get the volume of recruiting that you need to grow your company. Don’t pay representatives for the mere act of recruiting. All bonuses should be based on sales volume.
  • Insufficient Rewards to Teach Others
    Recruiting is important, but so is supporting your team members. Paying only a few levels of bonuses is insufficient to encourage and reward the team-building behavior.
  • Incomplete Plan Design
    If your compensation plan is not motivating and rewarding the 12 key behaviors, it’s incomplete.
  • Noncompliance
    It is critical that your compensation plan be in compliance with state and federal law. If you are uncertain, have it reviewed.

Repair or Replace?

When companies are struggling, sometimes the cause for struggle is a compensation plan in need of repair or replacement. Such compensation plans may exhibit one or more of the following conditions:

  • Insufficient recruiting
  • Low secondary title advancements
  • Unbalanced higher title advancements
  • Insufficient leaders
  • Lacking retail sales
  • Not enough activity

Compensation plan design is complex. It truly is a merger of science and art.

 

How to Audit Your Commission Run

How to Audit Your Commission RunCommission run auditing is a process of many steps to validate that your salesforce is paid properly and accurately based on the rules of your compensation plan. Stated another way, acceptance of responsibility for accurate payments = commission run auditing!

Your commission runs should be audited to ensure the earnings calculations are correct. Don’t assume your people are being paid correctly. Rather, assume they’re not because errors are common.

Representatives who are paid incorrectly can conclude that their trust in you is misplaced. Your representatives might “go away” if you don’t pay them as you promised, when you promised.

Some companies change their compensation plans every few months. Others change them every few years. You might find it interesting to learn that companies on average change their compensation plans once yearly. While compensation plan changes increase the likelihood that new errors will be introduced, some discrepancies don’t show up right away. This means the need to audit your commission run every month—or every week, if yours is a weekly plan—is imperative.

Reasons for Errors

Understanding the reasons for errors is the first step in reducing them. Misunderstandings are the primary cause of errors. Misunderstandings may exist between you and your software provider, between individuals at your company, or between employees of your software company.

Software programming bugs—title promotion errors, demotion errors and calculations—are a distant second. To minimize errors, insist that the internal documentation of your compensation plan includes examples of title promotions and upline payouts on a single transaction.

To help eliminate misunderstandings, ensure all communication on your compensation plan is in writing. Follow up every verbal discussion with a written list of decisions made. Also, have more than one person at your company review your compensation plan documentation for clarity and accuracy.

Request that your software company or your internal software developers, as applicable, prepare a “commission signoff document” in their own words to explain their understanding of your compensation plan. Insist that the signoff document include several examples of each type of commission and bonus that can be earned. Every exception should have its own example.

Who Should Audit Your Commission Runs?

Should it be your software provider?

  • Yes, when they deliver the initial compensation plan to you.
  • Yes, when they deliver changes in the plan to you.
  • Yes, when you ask them to perform this function as a response to an outstanding problem or concern.
  • No, at any other time.

Should it be your company?

  • Yes, every month (or week, if yours is a weekly plan).

As you can see, commission run auditing should be performed by both you and your software provider. The following items are essential in order to do a thorough job at commission plan auditing:

  • Full understanding of your compensation plan
  • Knowledge of the tools available to audit the plan
  • A testing mentality to exercise it fully

How Do You Audit Commission Runs?

We recommend that commission plan auditors develop a test plan that contains a checklist of items to test. Your checklist may include:

  • Promotions to each title
  • Demotions to lower titles
  • “Missed” promotions by a dollar in volume or a leg count of one, for example
  • Payment of each type of commission
  • Rollup
  • Compression
  • Exemptions

Each time, your live commission run should be fully audited. In a test environment under your control, test the original commission run and any subsequent commission plan changes.

Reports Required for Good Auditing

I have had the good fortune and opportunity to have audited the compensation plans of many direct selling companies using different multilevel software applications, each of which provides its own reports for auditing purposes.

To all companies, I recommend the following reports be used in the auditing process:

  • Total of sales volumes by order type for each commission period
  • Genealogy reports that show the sales organization in lineage order, using both “placement” and “enrollment” sponsor relationships, preferably with titles, paid-as titles, counts, volumes, and so forth, listed next to each person on the report
  • Detailed earnings statement per distributor with each commission and bonus earned listed separately
  • Reports of counts, volumes and other measurements taken for each distributor that were used to calculate his or her title and paid-as title
  • Transaction logs of each commission and bonus paid per order

President Ronald Reagan once said, “Trust but verify.” And I agree. Commission run auditing absolutely requires verification each and every time.


Jay LeisnerJay Leisner is the President of Sylvina Consulting. For 26 years, Jay has improved network marketing and party plan direct selling companies. Compensation plan design and evaluation are two of his specialties. For a confidential consultation, call Jay at 503.244.8787 or email jay@sylvina.com.

Filed Under: Working Smart

The Trouble with Technology

July 2, 2012 by DSN Staff Leave a Comment


Click here to order the Direct Selling News issue in which this article appeared.


Just when you thought you had it all figured out, somebody went and introduced a cool new technology and you are absolutely convinced that it’s perfect for your distributors. In your mind, they will love it! This new technology will help you grow your business to unbelievable new heights, and solve all the world’s problems along the way.

But what do you do with all those DVDs or distributor kits that are sitting in your warehouse? Who’s going to use that stuff when you have the coolest thing ever invented to replace them? After all, once people see this cool new gadget, why would they ever want to use a brochure or CD again? Those things are going the way of the 8-track tape—fast! Right?

Well, not so fast. It’s easy to get swept up in the next greatest thing, but pause to consider a few things before you clean out the warehouse inventory. Many of the companies that are growing the fastest today are using great technology, but they first created a great message and developed a system to teach the salesforce how to easily and effectively repeat that message. Only then did they put the message into play, not only in new tech gadgets, but in a variety of media.

The Message Matters Most


When we are surrounded by the “whiz-bang” wonder of technology, it’s critical to remember that the delivery system is just that—a vehicle to carry a message.


When we are surrounded by the “whiz-bang” wonder of technology, it’s critical to remember that the delivery system is just that—a vehicle to carry a message. The message itself, and the system by which it is shared, must be clear and defined long before the technology is even considered.

This list contains a handful of the vehicles still utilized effectively for delivering a great message:

  • CDs and DVDs—Yes, they still work and are super affordable.
  • Brochures / newspapers / magazines—They’re still a must-have for every company.
  • Websites—Of course!
  • iPad apps—You have to have the app or you are viewed as “out of touch.”
  • Mobile apps—the new “office” is a mobile phone.
  • Email—It’s more typing and less talking nowadays.
  • Conference calls—They’re still connecting people who are miles apart.
  • Events—Of course! Every direct selling company utilizes an event strategy.
  • Webinars—They’re getting better and more effective.
  • Social media—Remember, it’s more than just Facebook.

To state the obvious, it can be confusing. So, is there such a thing as the “perfect” prospecting or recruiting tool? To get to the point, No! There is no such thing as the perfect tool. In fact, “What’s the perfect tool?” isn’t even the right question.

Technology is definitely changing the way the world works. Remember when you said you would never get a cellphone, but now you’re a power user and asking Siri to help you with dinner reservations? That’s right. You are talking to your cellphone. Technological change eventually comes to all of us.

It can seem that direct sellers, like everyone else, like to push the envelope and, on occasion, have possibly jumped the gun on technology. It’s only a small exaggeration that just weeks after the introduction of the iPad there were recruiting apps from several direct selling companies. But did enough distributors even own an iPad to make the initial investment worthwhile? Probably not, but that’s how easy it is to fall into the perception that technology is passing us by and we’re now “behind the times” in terms of tools. Jumping into brand-new technology without careful thought can create more risk than benefit.


The right question—in fact, the first question—must be, “What’s my system for sharing my company’s message?”


So if “What’s the perfect tool?” is the wrong question, what’s the right question? The right question doesn’t even have anything to do with the technology itself. The right question—in fact, the first question—must be, “What’s my system for sharing my company’s message?” Only after developing a process can you begin to address the vehicles best suited to share your message.

Develop the System

Without a doubt, the development, implementation, teaching and reinforcement of the system you use is far more important than the choice of media you might choose to utilize. If you don’t have an easy and repeatable system for people to properly utilize your tools and messaging, there is a great chance that the tools will not be used at all. This again reinforces the fact that the results don’t reside in the tool itself, but in the core message.

My definition of an effective prospecting system is one that can be taught to a newcomer in the business today, and one that allows that new person to turn around and effectively deliver the same message to someone else and feel successful quickly—preferably within the first three to seven days, regardless of the media used.

For example, if you teach your distributors to hand out two videos every day and follow up within 48 hours, you are establishing a repeatable system. This method is easy to teach, easy to learn, and also maximizes the investment you have made in creating the DVD. New distributors can quickly learn the system, and put it into practice. With little effort or training, it becomes doable and repeatable, and ultimately, successful because of its ease.

Imagine the power of knowing that every new distributor in your organization is being taught how to share the message to achieve success the same way every time. What would that do to your company’s recruiting numbers? When you’ve developed a system, distributors can share with a friend or family member several states away from where they live, and you can be confident that they are being taught the business the way you would teach them if you were at their home. That is powerful!

The Right Tool for the Job

Though we would love to think that we can focus on the latest and greatest technological tool, get everyone on board utilizing it, and send sales and recruiting through the roof, the reality is that people learn and observe in all different ways. Some people learn better by reading, others by watching, some by doing and still others learn by listening. Some people love TV, others don’t watch it. Some are wired and connected to the Internet 24/7, while others still carry a flip phone and barely use email.

Within every category of learner, there are large groups of people who could be interested in your product or service and may be your next big business builders. Would you really want to possibly exclude them by focusing on only one type of tool? Of course not! In fact, different tools have different ideal uses.

Using technology appropriately so that you get the most from each exposure is critical. For example, people will typically watch a 4- to 5-minute DVD, but they generally won’t watch more than about 90 seconds of a promotional video online. The viewing experiences are very different, and when you are deciding which technology to employ, these types of considerations are very important.


It’s important to understand that the latest and greatest technological gadget doesn’t necessarily negate the power of “older” tools such as DVDs.


It’s important to understand that the latest and greatest technological gadget doesn’t necessarily negate the power of “older” tools such as DVDs. Let’s consider the types of situations that fit best with various messages in your business:

  • Prospecting / recruiting—video, audio, print, web, mobile
  • Training—video, print, web, events
  • Belief-building—events, webinar, video, print
  • Recognition—events, conference calls, print
  • Relationship-building—events, conference calls, email

Additionally, modern technology has its own set of “rules” and best practices. Below are a few parameters to consider when you are evaluating each tech tool:

  • Twitter—By definition, it’s short and sweet and you can link to other pertinent info (such as 90-second videos).
  • Facebook / Pinterest—A subtle delivery of powerful messages and relationship-building. Too much selling could alienate some viewers.
  • iPad—It works great for one-on-one presentations, but not as a stand-alone prospecting piece for someone to load and then view on their own.
  • DVD / CD—As long as cars have CD players and homes have DVD players and computers have DVD drives, these will be valid tools. Make sure the content is suited to your message and timed properly so that you capture and keep someone’s attention throughout.
  • Brochures / newspapers / magazines—Many people still love to touch and feel a printed piece, and it’s the only type of tool that someone can interact with immediately.

If your message is isolated into one type of media, you might have created a built-in excuse for someone to not watch, listen or learn about you. People want input on their terms—when, where and how they choose. If you’ve limited the approach of your salesforce, you have likely limited their reach as well.


People want input on their terms—when, where and how they choose.


Creating a compelling message, developing a systematic approach, and then determining the best tools to utilize is not rocket science, but it does take consistent effort and a commitment to do it well. Technology is great and it can change your business—but only if you use it properly.


Paul AdamsPaul Adams is Senior Vice President of Strategic Marketing for VideoPlus, which is celebrating 25 years of partnering with direct selling companies.

Filed Under: Working Smart

Nu Skin’s Ability to Create Smiles around the World

July 2, 2012 by DSN Staff Leave a Comment

Students at the Community Based Childcare Center in Malawi, Africa, become healthy, well-fed, and better learners at school after receiving nutrition such as VitaMeal each day for lunch.


Click here to order the Direct Selling News issue in which this article appeared.


Xiao Bai He, an orphan in Hengshui region, China, who suffered from severe malnutrition, is happy and healthy after receiving VitaMeal for several months.
Xiao Bai He, an orphan in Hengshui region, China, who suffered from severe malnutrition, is happy and healthy after receiving VitaMeal for several months.


According to UNICEF (State of the World’s Children, 2008), “Every day, on average, more than 26,000 children under the age of five die around the world, mostly from preventable causes. … In up to half of under-five deaths an underlying cause is under-nutrition, which deprives a young child’s body and mind of the nutrients needed for growth and development.” If only a small percentage of the population was willing to contribute two meals per day, millions of lives could be saved.

Ten years ago Nu Skin took action to address the tragedy of childhood hunger with our Nourish the Children (NTC) initiative. This innovative social enterprise applies the rigor of successful business practices to provide a consistent and growing supply of nourishing food to the children in the world with the greatest need. Since it was established, the Nu Skin family has donated more than 250 million meals to malnourished children in more than 50 countries.

Direct Selling News recently honored Nu Skin and our NTC initiative with the Bravo Award for humanitarian leadership at its Global 100 awards gala. We were deeply honored they selected us and noted our innovative approach to world hunger.

Nu Skin’s Mission: Be a Force for Good

Our success at Nu Skin can be attributed to many things—great products, great leaders and great markets. But there is an additional critical element—the giving, nurturing, generous culture that we have built with our distributors. This unique culture is so central to our success that it is built into our guiding company mission statement:

“Our mission is to be a force for good throughout the world by empowering people to improve lives with rewarding business opportunities, innovative products, and an enriching, uplifting culture.”

Nu Skin’s force for good culture is not just a slogan we can point to when telling others about the business. Our commitment to improving lives is an integral part of who we are and what we do at Nu Skin. That is why we launched our Nourish the Children initiative—it made sense because being a force for good was in our DNA.

Why the Nourish the Children Initiative


Consider the fact that every day more than 15,000 children die from malnutrition.


Consider the fact that every day more than 15,000 children die from malnutrition. That is 105,000 children a week and 450,000 children each month, which means every year, 5.5 million children die because they do not have enough food to eat. One child starving would be too many—hundreds of thousands is an untenable blight on civilization.

Through NTC we are helping children in a very innovative way. It is an entirely new approach to helping children. Nourish the Children is a free enterprise approach to alleviating starvation among the world’s most vulnerable people—its children. NTC combines the rigors and efficiencies of successful business with the inherent goodness of Nu Skin’s employees, distributors and customers to address the epidemic of hunger and malnutrition.


In 2011 alone, the Nu Skin family purchased and donated more than 20 million meals for malnourished children in nearly 20 countries.


Nu Skin makes a special food for malnourished children called VitaMeal®. It is developed by Nu Skin nutritional scientists and collaborators. Specially formulated for malnourished children, VitaMeal features 25 vitamins and minerals, as well as a careful balance of carbohydrates, protein, fat and electrolytes. Our employees, distributors and customers purchase bags of VitaMeal the same way they purchase any other Nu Skin products. The product is then donated to one of our nonprofit charity partners, who distribute the meals at no cost to the children with the greatest need. Regular VitaMeal shipments are sent to feed hundreds of thousands of children in places such as Africa, China, the Philippines, Thailand and South America. In 2011 alone, the Nu Skin family purchased and donated more than 20 million meals for malnourished children in nearly 20 countries.

Making a Difference in Malawi

Malawi is one of the many places that Nu Skin is making a difference in the lives of children. A couple of years ago, I accompanied a group of Nu Skin distributors on a trip to Malawi. The African country has a population of about 12 million people, 2 million of whom are AIDS orphans. One morning we drove a couple of hours out of Lilongwe to a village, which houses about 100 of these AIDS orphans in a little one-room, red-brick schoolhouse where we would help serve VitaMeal. As we arrived and entered the school, the kids were wall to wall, sitting cross-legged on the floor singing songs. There was no furniture. They sang with such enthusiasm that you almost wanted to protect your ears.

Outside there was a wood fire, built of branches broken off of nearby trees. Soon there was a large pot of water on the fire being mixed with VitaMeal.

A line formed as bowls were filled and passed with spoons to the front children, and then deeper into the room. I was in the back of the room surrounded by 100 little bodies vibrating with excitement. The sweet smells of VitaMeal filled the air, just like in your mother’s kitchen.

I stepped outside for a minute to catch my breath and gather myself, and I leaned against the back wall. I looked out and saw in the distance women in every direction running and pushing their children ahead of them. Word had gotten out that there was food in the village, and they came running for miles. I went back inside and word trickled to us in the back of the room that we were running out of food. There were still a dozen kids without a bowl. Our hearts sank as the last portions passed through our hands.

The children saw that the food was running out, and then this amazing thing happened. As the last four or five bowls were handed out, the children who received those bowls walked through the crowd, spread themselves out in the back of the room, dropped to the floor, and instead of eating, pushed their bowls out in front of them and invited others to sit down, then passed spoons around and shared. Everyone got some spoonfuls. Soon the children were back to singing and laughing.

As I looked around the room, I realized we were the only ones crying. The children were fine. They were used to this—were used to making the best of things. It occurred to me that even in this difficult place there were more smiles than tears. Lots more.


I have looked into children’s faces and seen their gratitude because of the support of the Nu Skin family.


Later that day we took a truck full of VitaMeal and distributed that to the parents in this village, and those mothers who I had seen running through the countryside were now celebrating and returning home with enough food to keep their families healthy for a while.

Through the years I have had the immense privilege of witnessing the difference Nu Skin is making in people’s lives, particularly through our distributors’ kindness and generosity. I have seen our distributors’ goodness, offering a hand of hope to children who stood helpless with disease, hunger and poverty. I have looked into the children’s faces and seen their gratitude because of the support of the Nu Skin family. At its heart, this is what this business is all about—lifting people, helping them to become more than they thought was possible, and then inspiring others to do the same.


Steve LundSteve Lund is Nu Skin Vice Chairman of the Board and Executive Director of Nourish the Children.

Filed Under: Feature Articles

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