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Sports Sponsorships: Kicking It Up a Notch

November 2, 2009 by DSN Staff Leave a Comment

Cover story

Direct sellers, especially those with nutritional products, have long counted athletes as some of their biggest fans. By landing high-profile sponsorships with Major League Soccer teams, Olympic gold medalists and IndyCar drivers, direct selling companies are enhancing both their businesses and their brands.

No matter whether the athletes are members of a team or individual sport, they demand a lot of their bodies. They must bounce back from injuries quickly, endure grueling physical tests and stay mentally focused. And they have to do all that while maintaining a killer travel schedule that makes nutritious eating and even getting regular rest, well, a challenge. With a lifestyle like that, carefully chosen supplements become an important competitive advantage.

So when an athlete or team discovers a high-quality product from a direct seller, both the athlete and the team can benefit.

The companies who spoke with Direct Selling News are justifiably proud of their sports sponsorships. The sponsorships and endorsements run the gamut from soccer teams to bodybuilders, and from race car drivers to rodeo cowboys. International companies usually have sponsorships that span the interests of their global constituencies. And the athletes themselves sing the praises of the products and the company because they genuinely believe in them. Those Air Jordans netted Michael some megabucks, but athletes and teams who lend their names to direct sellers’ supplements typically are compensated only with the products they use.

Olly Freeman

Fan-ning the Flames

Perhaps the industry’s most visible sponsorship is the Herbalife name emblazoned on the front of the shirts of the Los Angeles Galaxy soccer team. That jersey has now become the top-selling Adidas sports jersey of all time, raising awareness of Herbalife worldwide. Just as important to the company, it’s been a huge boost to distributor confidence and pride.

“Whenever a game is televised around the world, it gives us all goose bumps when we see Herbalife on the Galaxy jersey,” says Des Walsh, Executive Vice President for Herbalife’s Worldwide Operations and Sales.
Herbalife became active in sports sponsorships five years ago when then-new Chairman and CEO Michael O. Johnson, an avid triathlete, inspired the company to become a sponsor of the Nautica Malibu Triathlon. Since then, it has helped fund numerous events and has developed about 65 different sponsorship agreements worldwide. Major soccer sponsorships alone include Valencia CF, one of Spain’s most popular football teams; Internazionale FC (Inter Milan) in Italy; and FC Strasbourg in France, as well as the Galaxy. Around the world it supports professional cycling and basketball teams, as well as individual world-class athletes in sports that range from arm-wrestling to volleyball.
Aspiring athletes also benefit from Herbalife’s sponsorships. About 600,000 kids participate in the American Youth Soccer Organization, where the only requirement is that participants want to play soccer. Herbalife is a premier sponsor, and its official provider of health, wellness and nutrition products.
In addition, its distributors sometimes sponsor a wide range of individual local athletes and teams.

Sponsorships of pro and world-class athletes typically begin when Herbalife learns that the athlete is using one or more of the company’s products.

“We’re not interested in an athlete’s endorsement unless they’re products of the product,” Walsh explains. “Over the years, many athletes around the world have been customers of Herbalife distributors. As they have risen through the ranks through their performance, they have reached a stature that makes it worthwhile for us to be associated with them.”

Ronaldinho

Team Spirit

Other direct sellers echo Herbalife’s approach.

Trent Tenney, 4Life Senior Vice President of Marketing, notes that an athlete’s ability to stay well is tested on the competition field. “When we hear of athletes who are using Transfer Factor to be sure they aren’t going to break down, we’re interested,” he says. “For example, [San Francisco Giants shortstop] Edgar Renteria came to us and said that he had an amazing experience with 4Life Transfer Factor and was able to stay on the field more days of the year. He understands the connection between the immune system and the challenges that athletes have.”

RenteriaRenteria is the newest member of Team 4Life—an elite group of world-famous athletes who endorse 4Life Transfer Factor® products. The team includes World Golf Hall of Famer Johnny Miller; Ian-Baker Finch, winner of the British Open and winner on all four major tours; four-time Olympic medalist Mark Todd, an equestrian who competed in his fifth Olympics at age 52; and Brett Burton and Andrew McLeod, stars of the Adelaide Crows Australian Football Club.

“When you take a world-renowned athlete and show distributors that they use the products, it’s a wonderful way to edify the decision they’ve made to partner with 4Life,” notes Calvin Jolley, 4Life Vice President, Strategic Development. He emphasizes that the company carefully selects athletes to add to its short roster of endorsers. “There’s a vetting process. There are well-known athletes who are taking our products who aren’t a good fit for Team 4Life. We’re not looking for just anyone who has a claim to fame. When you tie an athlete to a product, they become a brand ambassador. How they perform in public and who they are becomes a representation of your brand.”

No Dope

USANA began selecting athletes to endorse products some 15 years ago, beginning with the Canadian speedskating team that was competing in the Olympics. At that time, Olympians were skeptical of supplements because they feared that the nutritionals would cause them to test positive for banned substances. The Olympians were interested in the company’s products because it offered them an ironclad solution through its Athlete Guarantee Program.

“We don’t make any other products than our supplements, so there’s less opportunity for a contaminant to get in that could be questionable in sports,” explains Alan Bergstrom, USANA Vice President of Customer Service. “I don’t believe that anyone is making supplements are purposely contaminating, but when a company makes other products, their supplements can become contaminated. We make all our tablet products and all the Athlete Guarantee products in-house. It’s a great selling point.”

He notes that USANA recently started an even more stringent testing program with an outside lab known for its testing capabilities and identification of banned substances in supplements. He notes that labs are becoming able to detect smaller and smaller amounts of substances, so more stringent testing offers an athlete yet another assurance.
“We offer basic vitamins and minerals, not sports supplements,” Bergstrom notes. “They help athletes and others meet basic daily nutrition requirements, but if you want to be able to take a supplement and not worry about ingesting a banned substance, look at our quality.”

USANA endorsements are primarily from well-known Olympic athletes. Because their sponsorships often include entire teams, some 650 athletes are involved in its sports sponsorship programs. But anti-doping standards are rigorous in professional sports, too, and USANA products are also endorsed in that arena. In fact, the company sponsors the Sony Ericsson WTA Tour. Bergstrom says that tennis is known as a “clean” sport that is serious about maintaining that reputation, so it makes a perfect vehicle to demonstrate product purity and effectiveness to distributors and customers.

Verve

All-Star Endorsements

AdvoCare also recognized the importance of assuring athletes that its products were pure, so it formed a strategic alliance with Informed-Choice to certify that its products are banned-substance free. The Informed-Choice program adheres to regulations put forth by the World Anti-Doping Agency and NCAA as well as professional sports organizations.

The certification of AdvoCare’s pure products helps clear the way for athletes to use the products and make endorsements. AdvoCare products are endorsed by athletes such as New Orleans Saints quarterback Drew Brees; Olympic gold-medal-winning U.S. women’s soccer team midfielder Carli Lloyd; and Milwaukee Bucks guard Michael Redd, whose USA men’s basketball team took the gold medal in the 2008 Olympics. Those three are among about 75 athletes who endorse AdvoCare products.

AdvoCare will take its sports sponsorship to a new level on Dec. 28 when it sponsors the AdvoCare V100 Independence Bowl, a post-season NCAA-endorsed Division I college football bowl game that has featured top college teams for the past 34 years. ESPN will televise the game, and the company’s logo has in-your-face placement throughout the stadium. The company chose the opportunity to boost its branding.

“The company is all about independence from debt and poor health, so the name seemed to fit us,” says AdvoCare Director of Endorsements Rob Graf.  “Already, we have the AdvoBus touring every Saturday to a different college football game in an area where we have strong leadership. We have a big tailgate party around the bus. It all leads up to the Independence Bowl. We’ll be organizing mixer events in distributor households around the game. That night when we’re on national TV will be a huge opportunity for our distributors. Whether they’re one person at home or they’re with 150 in a hotel, every distributor who wants to can be involved.”

Getting Official

Sports sponsorships were also a natural for Vemma®. Its energy drink Verve! is now the official energy drink for three professional sports teams in the company’s hometown: the Phoenix Suns basketball team, the Phoenix Coyotes ice hockey team and the Phoenix Mercury women’s national basketball team.

Vemma has energetically pursued the connections, taking them well beyond providing beverages to the teams. At US Airways Center, home of the Suns, fans can enjoy the game in a nightclub setting called the Verve Energy Lounge™. Vemma and Verve branding appears prominently in the stadium. And perhaps even more impressive, the Suns franchise is actually a Vemma distributor. Verve is on sale at its arena during home games, as well as over the Web through an ad that links to the Verve Web site.

Verve also presents CafeMerc.com, a social networking site where Phoenix Mercury fans build their own profile pages, write blogs, participate in message board discussions and upload Mercury-related photos, artwork and videos. Fans also can purchase Verve at CaféMerc.com by clicking through to VerveEnergyDrink.com. The Phoenix Mercury plays in US Airways Center, so Mercury fans also have exposure to all the same Verve promotions that Suns fans enjoy, including the Verve Energy Lounge.

The Coyotes’ agreement is similar. Verve is sold at all concession stands and luxury suites throughout Jobing.com Arena and will be available in the arena’s two premium club rooms. Coyotes fans across North America are encouraged to learn more about Verve and the Coyotes’ home-delivery option by visiting
www.CoyotesEnergy.com.

“It’s such a unique part of our program,” says Vemma President and CEO BK Boreyko. “It empowers our members with instant credibility so they feel confident talking about the products with anyone. Even better, when people discover that these teams have actually signed up as members, they immediately come to the conclusion that this business model is something they need to seriously take a look at for themselves. I mean, if it’s good enough for the Suns, how can any prospect not see the potential?”

Boreyko also notes that sports sponsorships open a new market for the company and its products.

“Marketing Verve with sports teams and athletes has allowed us to reach audiences that we may not have normally been able to reach through our traditional marketing efforts,” he says. “The level of energy and brand loyalty that sports fans have is impacting our overall company and brand.”

Vemma’s sports sponsorship program also extends to the PGA Pro Tour and member Ricky Barnes. Sporting Verve gear, Barnes introduced the golf world to Verve as he finished second in the U.S. Open. And San Diego Chargers linebacker and three-time Pro Bowl player Shawne Merriman stepped beyond being a spokesman to becoming a member.
Beyond professional sports, Verve sponsors youth snowboard teams, and is the official energy drink of the Arena Football League’s L.A. Avengers and the Native American Basketball Invitational tournament, as well as of other groups.

Drew BreesAll-American Endorsement

Football, basketball, hockey, even golf. What’s missing? Baseball, of course. But MonaVie couldn’t ignore the all-American pastime. Its new all-natural energy drink MonaVie EMV ™ is now the official healthy energy drink of the Los Angeles Angels of Anaheim. MonaVie never misses an opportunity to raise awareness and money for its charitable foundation, the MORE project, so it linked the sponsorship to an auction that gave MonaVie distributors a chance to win one of several premium baseball game packages. The top prize even included throwing out the first pitch of a game.

Last year, MonaVie announced a partnership with the Boston Red Sox that makes MonaVie an official juice of the Major League Baseball team. This year, the company capitalized on the agreement by taking MonaVie’s top six Star Maker distributorships to Fenway Park. The distributors flew first-class to Tampa Bay, Fla., where they joined MonaVie Founders Dallin and Karree Larsen for a trip on the MonaVie Jet to Boston. There, they stayed at a luxurious hotel and attended the Boston Red Sox vs. New York Yankees game at Fenway Park with Dallin and Karree.

Numerous individual athletes in professional sports ranging from football to bodybuilding to rodeo are MonaVie endorsers. Many of the endorsers are also MonaVie distributors. One of the latest agreements is with IndyCar driver Tomas Scheckter. (Please see “Racing to Recognition”  sidebar.)

MonaVie executives see a sports tie-in as a natural for the company.

“The overwhelming majority of our distributors describe themselves as being in exceptional health,” explains Founder and Vice Chairman Henry Marsh, a four-time U.S. Olympian. “When they’re not hosting tasting parties, more than likely, you’ll find them out on the green or at the local fitness center. It’s part of the MonaVie culture. Sports sponsorships help our distributors connect with like-minded health enthusiasts. It only makes sense to partner with some of the most recognized names in sports—the Boston Red Sox, the Los Angeles Angels and the Indy League. These sponsorships give MonaVie distributors an additional opportunity to network. There’s a growing enthusiasm for MonaVie products among professional and amateur athletes, and sports sponsorships fuel the momentum.”

VerveBrand Building

Direct sellers have found many ways to utilize their sports sponsorships, and industry leader Amway and its North American affiliate, Amway Global, have an extensive program to support branding efforts. Although Amway isn’t typically thought of as a health and wellness company, it is actually the No. 1 online retailer in health and beauty in the United States, according to Internet Retailer. Its numerous sports sponsorships in the United States and around the world help underscore that message.

Its sponsorships raise awareness of Amway and its NUTRILITE® brand through on-jersey sponsorships, venue signage and media relations. Amway also leverages the sponsorships to build excitement with Amway independent business owners in a variety of marketing materials.

“Sports sponsorships make tremendous sense for Amway because we’re celebrating our 50th anniversary this year, yet many people don’t really know who we are,” an Amway spokesperson commented via e-mail. “We haven’t really engaged in traditional advertising or consumer marketing over the years, and we are reintroducing ourselves to the public through a variety of initiatives, including national advertising, public relations campaigns, Mobile Brand Experiences and sports sponsorships.”

Because of the global reach of both the sport and the company, soccer seems to be Amway’s sponsorship sport-of-choice. Amway Global is the presenting sponsor of the Los Angeles Sol, a member of the Women’s Professional Soccer League. Sol forward and three-time Fédération Internationale de Football Association (FIFA) World Player of the Year Marta Viera da Silva endorses the company’s health and beauty power brands, NUTRILITE and ARTISTRY®. It also sponsors the San Jose Earthquakes, A.C. Milan—which has won the largest number of international trophies in history—and its two-time FIFA Player of the Year, forward Ronaldinho.

Through an exclusive, two-year agreement between NUTRILITE and the Milanello Training Sports Center, NUTRILITE products are fully integrated into the training and nutritional regimens of every player on A.C. Milan. The Milanello Training Sports Center is home to Milan Labs, a research center focusing on the psychophysical integrity of athletes.
Amway’s sponsorships in both soccer and other sports are numerous, but one of the most visible is the NUTRILITE sponsorship of the Rock ’n’ Roll Marathon series, seven races that incorporate miles with music, as well as four other prominent distance-running events. The NUTRILITE Mobile Brand Experience vehicle is present at each race and provides event attendees with product samples, brand exposure and perks for runners.

Ricky and Dandy

When distributors use endorsements
as part of their business
presentations, that tells a company
 that they work. Likewise, when
 distributors sponsor local athletes
and teams, it’s clear that they see a return on their investment.

Sports Stories

Direct sellers typically leverage their sports sponsorships in their marketing, publishing endorsement quotes in company literature and Web sites or inviting athletes to speak at company events. Sometimes the athlete’s story is so memorable that it is retold over and over. The one that Herbalife’s Des Walsh remembers vividly was the testimonial from IndyCar driver Townsend Bell. One of Bell’s favorite Herbalife products is the H3O® Fitness drink, which he credits with helping him stay on the track after his hydration pump broke early in this year’s Indianapolis 500.

Bell was wearing a special suit designed to protect him from fire, sitting on top of a race car engine just 4 inches off the ground in a concrete stadium where the temperature reaches 90 degrees or more. Driving at 140 miles an hour, he had to keep his hands on the steering wheel at all times for hours on end, so he kept a tube from his hydration pump in his mouth at all times so he could drink from it and stay hydrated during the race.

“The hydration pump actually broke down, but because he was so well hydrated with H3O, he elected not to take a pit stop to replace the faulty pump,” Walsh recalls. “Because of the effect of H3O, he could maintain hydration and concentration, and he ran fourth in one of the most competitive races on earth.”

Tomas

Checking the Score

Direct sellers acknowledge that the value of sports sponsorships is hard to measure. Amway and 4Life had the most structured measurement programs of the companies that spoke with Direct Selling News.

Amway evaluates the effectiveness of its endorsements through the number of media impressions earned by the endorsements and the relevancy of those impressions. Media impressions measure the number of people who may have seen an article, heard something on the radio or in a podcast, watched something on television, or read something on a Web page or blog. 4Life builds and measures product promotions around Team 4Life, and it makes a point of measuring the “hits” on its Web site on featured athletes.

But the metric that matters most is the opinion of distributors. When distributors use endorsements as part of their business presentations, that tells a company that they work. Likewise, when distributors sponsor local athletes and teams, it’s clear that they see a return on their investment.

AdvoCare’s Graf captured the attitude represented by every company: “I love hearing stories from distributors. Several top distributors have told me, ‘I was on the fence about AdvoCare until I saw the story of an athletic endorser in an AdvoCare magazine. That flipped the switch for me.’ It changes people’s lives because it gets them involved.”

CEO Tami Longaberger is joined, from left, by former Cleveland Browns wide receiver Reggie Langhorne, quarterback Bernie Kosar and defensive back Hanford Dixon at the Longaberger tailgate party in Cleveland held in late summer. Tami Longaberger and Kosar have participated in a number of tailgate events the company is holding around the country to promote the new NFL, collegiate and Team Spirit collections.

Team Spirit in a Basket

The Longaberger Company has launched a way for its consultants and customers to combine two passions: Longaberger baskets and sports. It has teamed with the National Football League on a collection of basket sets featuring all 32 NFL teams.

The new NFL Lineup series of baskets is the latest member of Longaberger’s “Fan Favorites” offerings, which also includes the Longaberger Collegiate Series and the Longaberger Team Spirit baskets. Nine basket styles and accessories are included in each line. According to Longaberger, the basket sets are a functional, fun and decorative way for fans to support their teams at tailgating parties or at home.

TS-Steelers-3bkt-grp-8203.jpgThe NFL baskets display team colors on the baskets with official logos engraved on accompanying hardwood maple lids. In its collegiate line, Longaberger baskets sport the official logos of Ohio State University, Michigan State University, Indiana University, University of Iowa and Virginia Tech, with other universities becoming available soon. The Team Spirit line lets fans choose among baskets that feature 21 color combinations, selecting the one that lets them show support for their high school or community team.

Longaberger launched the new lines through a series of huge tailgate parties at pro and college games around the country. Local home consultants helped organize the events, and Longaberger CEO Tami Longaberger attended and signed baskets. Longaberger’s spokesman says that the new product line has been a huge success.

“We have made some significant investments in the last year and a half in the basket-making process to offer a variety of designs and different colors,” says Tom Matthews, Longaberger Executive Director of Corporate Communications. “This is an example of some of the things we’re able to do as a result of those investments.”

The new product lines have let the company reach a new set of customers—sports fans who may not have considered baskets as part of the game-party decor until now. After football season ends, basketball begins, and March Madness provides yet another  occasion to use team-color baskets to serve snacks and beverages.

“It’s no secret that the baskets tend to be purchased by women more than men,” Matthews notes. “But we’re hearing consultants say, ‘I bought four baskets for my son and husband for Christmas. They’re going to love this.’ Would she have normally purchased that basket? Probably not. But now she’s feeling that she can share Longaberger with the men in her life in a different way. It’s been a fun and exciting thing so far.”

Racing to Recognition

Two prominent direct sellers have captured the excitement of IndyCar racing and grabbed their share of the name recognition among racing’s huge fan base.

Herbalife and MonaVie each sponsored drivers—Townsend Bell and Tomas Scheckter, respectively—in the Indianapolis 500. Both drivers powered vehicles emblazoned with their sponsoring company’s names throughout the 500-mile, 3.5-hour race. Venezuelan IndyCar driver E.J. Viso also endorses Herbalife products.

There’s no doubt that race car drivers are athletes whose bodies take a beating. For example, on an oval, IndyCar Series drivers endure G-forces equal to nearly four times the weight of gravity while going through turns. The space shuttle leaves the launching pad at Cape Canaveral with approximately the same force. And drivers must stay hydrated, well-nourished and mentally focused to concentrate at speeds of more than 200 miles an hour.

Did MonaVie and Herbalife products help the drivers perform? Let the record speak for itself. Herbalife’s Bell finished fourth, while Scheckter, helping to introduce the new brand MonaVie EMV, was close behind, finishing 12th.

Healthy Heroes

Encouraging healthy lifestyles is key to many direct sellers who offer nutrition products, so sports sponsorships help them deliver that message. And since so many direct sellers offer top-notch supplements and nutrition products, it’s no wonder so many companies have strong supporters among individual athletes and teams. The list is extensive, and while we couldn’t include every company, here are a few that exemplify the depth and breadth of sports sponsorships in the industry.

Pharmanex

More than 125 staff scientists, plus independent laboratories and scientists from around the world, ensure that Pharmanex products don’t contain any banned substances. So a large group of elite athletes known as “Pharmanex Champions” endorse the products. Olympic athletes, world-class professional athletes, Duke University’s men’s basketball, and the 21 varsity sports at Brigham Young University all participate in the program. Represented sports from around the world range from Norway’s Vålerenga ice hockey team to American overall junior snowboarding champion Chris Klug to elite cyclists and runners.

Xango

“The jersey-front sponsorship has always
 been referred to as the ‘Holy Grail.’ When
 the owner of the Real Salt Lake soccer
 team approached us as a possible sponsor,
 it was a real fork in the road because a
 professional sponsorship on a jersey,
while very common in other parts of the
 world, had never been done in America.”

XanGo Co-Founder Aaron Garrity   

XanGo

It’s all about the brand at XanGo, which expanded its brand presence through a landmark jersey-front title sponsorship deal with Major League Soccer and Real Salt Lake, the first of its kind in major league U.S. professional sports. As part of the sponsorship, XanGo built and donated a practice facility for Real Salt Lake, located on XanGo’s Utah campus. The multiyear deal includes signage and promotional opportunities at the team’s sports and entertainment venue, Rio Tinto Stadium. Additionally, XanGo and RSL will continue the annual tradition of the XanGo Cup, which pairs RSL and an international soccer powerhouse in a friendly match. This year’s XanGo Cup, the fourth, featured Clúb América, Mexico’s premier soccer club.

Chauncey

Tahitian Noni

With operations in more than 30 countries, it makes sense that Tahitian Noni’s sports sponsorships would span many countries, as well. Its sponsored athletes come from Norway, China, Jamaica, Ireland, Japan, New Zealand, Brazil, the United States and other countries. Their sports include everything from mixed martial arts to basketball to cross-country skiing to surfing. The common link is that all the athletes use Tahitian Noni products to help them stay in championship form.

Shaklee

Although the company is probably better known for its environmental advocacy, Shaklee is a champion when it comes to sports sponsorships, too. Its endorsers include the U.S. Ski Team® and the U.S. Snowboarding Team™; a wheelchair racer; a Masters athlete in cycling who is still going strong and winning championships in his early 50s; a world-class competitor in the sport of Modern Pentathlon; a pioneer in the professional wakeboarding tour; and several others. The athletes often point to Shaklee products as their not-so-secret weapons that help them recover quickly and maintain long, high-performing careers.

 

Jennifer Azzi

Endorser Evolution

Direct sellers have an athlete’s heart, or at least their skill set, according to Jennifer Azzi. She should know. She evolved from USANA user to endorser to Ruby Director distributor.
Azzi’s athletic accomplishments underscore her attitude toward direct selling. She earned a gold medal as a member of the U.S. women’s basketball team in the 1996 Olympics, led her Stanford University team to an NCAA National Championship and her WNBA teams to conference finals, played internationally, and was repeatedly named to All-Star teams. Her awards include Female Athlete of the Year, the Naismith Award, five different Hall of Fame inductions, and more.

While she was playing for the WNBA’s Utah Starzz, her strength coach searched for supplements that the players could use. The team’s demanding schedule made it hard for them to eat right. They might have a game in New York City one night, then have to fly to Los Angeles to play there the following night. Add their training schedule to that mix, and the coach recognized that their bodies were being taxed to the max. The challenge was to find supplements that wouldn’t test positively on drug tests. What she found was USANA.

“In my 13-year career with the Olympic team, we were told not to take supplements at all, and I began to not trust the supplement industry at large,” Azzi recalls. “Frankly, I was skeptical about USANA at first. It had been so ingrained in me not to take supplements. But then I learned about Dr. [Myron] Wentz and the science behind USANA. It was more about health than athletics.”

When Azzi heard USANA’s compensation plan, she immediately understood and appreciated the concept of residual income because she already had investments in real estate.

“You put in the work, and you work hard, but you’re also leveraging time and the work you did in the past,” she says. “An athlete’s skill set translates well into a business like this. You have to train your body and put in time on things that are not that much fun in order to have that one great game. You deal with rejection and with loss, but you get up and keep on going. Sometimes people think you’re nuts for doing what you’re doing. Athletes as well as network marketers deal with all those things.”

Azzi decided that since she was already lending her name to a product she believed in, she might as well make a business of it.

“Why wouldn’t I want to?” she asks rhetorically. “I’m using the products and telling everyone to take them. It’s something I believe in. If I’m doing all that, why wouldn’t I be a distributor?”

Filed Under: Cover Stories Tagged With: Shaklee

Two Steps to Success

November 2, 2009 by DSN Staff Leave a Comment

Before and AfterArdyss International is a different shape of wellness company. Its focus starts on the outside, with its body-reshaping undergarments, and then continues over time with nutrition and skincare products that keep users feeling great and looking great.

Ardyss calls it the BodyMagic 2 Step System, and it has attracted a distributor base that is growing in the United States at a jaw-dropping rate of 40 percent a month.

While Ardyss is new in the United States, it got its start in Mexico two decades ago. The family-owned business also operates in the Dominican Republic, Puerto Rico and Venezuela. It grew organically in the United States almost two years ago as its Mexican distributors introduced the company’s unique products and business opportunity to their friends north of the border. Initially, the company’s focus was on the Spanish-speaking community of its distributors in the United States, but as awareness grew, there was no holding back its opportunity. Its marketplace exploded.

Mike PotilloMicrowave Society

Americans’ desire for immediate gratification is a good fit for the Ardyss philosophy. In 10 minutes, the company’s undergarments reshape women’s bodies, reducing them up to two dress sizes. And, according to the Ardyss slogan, the opportunity can reshape lives in a year.

“Our slogan is ‘An appointment with Ardyss will change your life.’ Give us a year with the company, follow what we lay out for you to do, share the products, and there’s no question your life will be changed,” says Mike Potillo, Ardyss International’s Vice President of Marketing and Director of the American Market. “Many create extraordinary incomes in a short time, and others create a consistent income over time. Still others haven’t made a lot of money, but they use the garments, take the products and love what Ardyss has done for them.”

Potillo became part of Ardyss after an 11-year direct selling career with other companies. He started out as an $8 per hour employee with a network marketing company in Kentucky, actually dropping out of college to take that job. After two years, he was the company’s top distributor, and played a role in buying it out and merging it with another company. He became the new company’s No. 3 distributor worldwide. Eventually, he became a consultant and motivational speaker. At a networking event, he met Ardyss founder Alejandro Díaz de León.

“I asked him, ‘What’s your hook? What attracts people to your products?’ ” Potillo says. “What he said next totally revolutionized my thinking. He said, ‘We have a product that in 10 minutes lets you drop two to three sizes without diet, exercise, pills or surgery.’ My jaw dropped. ‘It’s a reshaping garment. There are 20 different variations for men and women.’ ”

That night, Potillo called his wife and told her about Ardyss and its amazing products. Her positive reaction made him realize that a new body shape could also reshape the wearer’s attitude about himself or herself—actually boosting self-esteem. So he put on his consultant hat and joined the company. A couple of months later, Díaz de León asked him to Americanize the company.

For 20 years, the Díaz de León family has been changing lives!All about Distributors

He says that his background has given him a distributor’s mindset, and his attitude matches the way the Díaz de Leóns run Ardyss. Every decision is based on the question, Will it benefit our distributors? Company goals are typically expressed in terms of distributor accomplishments. For example, the founders set a goal to create 200 new Presidential distributors in 2009. By September, they had already reached 180. Along with their Presidential leaders, they set a goal to reach $3 million in sales in one month. The next month, they did $4 million. Inspired by the Direct Selling News $100 Million Club report, Potillo has set his sights on being on the list next year.

Potillo says that Ardyss sets high goals, but it tends to achieve them. Just as BodyMagic is a two-step process, Ardyss distributors are attracted by the dynamic duo of unique products and powerful compensation plan.

The first Ardyss magnet is the BodyMagic reshaping garment. Some 20 versions are available to slim the whole body or to target specific problem areas. Distributors introduce the reshapers and the opportunity at an Ardyss Showcase, which is like a home party. The showcase begins with information on the company, its history and story. But it quickly turns to the product that drew everyone: the BodyMagic reshaping garment. That’s when the excitement begins. The distributor chooses one to three willing guests and reshapes them before the other guests’ eyes in about 10 minutes.

The distributor works privately with other guests.

“If you come in with a negative paradigm, you’re transformed instantly when you see the results on someone,” Potillo says. “I’ve been to hotel meetings my whole career, where all you had was somebody’s word, but when people go to a Showcase in a distributor’s home, they can see the results with their own eyes in a matter of minutes. Seeing is believing, and it’s a motto that Ardyss International has perfected.”

Le ViveShaping a New Life

In that environment, Potillo says the garments almost sell themselves. The reshaper carries a money-back guarantee, but customers don’t need it, because they can see their own results before they buy. Ardyss-brand skincare and nutrition products and LeVive antioxidant juice then provide a steady, recurring income for distributors.

With such a dramatic presentation, it’s no wonder that a high percentage of Showcase guests become distributors. They come for the products, but stay for the Power Start compensation plan.

“The Power Start is a bonus in addition to the rest of our compensation plan that systemizes people’s businesses,” Potillo says. “Ardyss created a bonus structure that shows people exactly what to do to create the maximum income in the short term and in the long term. The plan spells out exactly what to do to create a certain amount of income, and it sets targets each month for 40 months. And if you achieve the goals quicker than we tell you to, you don’t miss out. We add up the bonuses and pay them to you all at once.”

He says that the compensation plan enables distributors to achieve six-figure checks in record time, since they earn a 100 percent match on the sales of those they enroll.

“The garment is the hook, but the Power Start sets us apart from others,” Potillo says. “It teaches distributors how the business is done. After that, other bonuses have a way of taking care of themselves to create long-term residual income.”

He proudly points to one of the company’s distributors as an example.

“Last December, he couldn’t buy Christmas gifts for his children, and his lights were about to get turned off,” Potillo says. “But last month, he earned more than $100,000. Over and over again, I hear stories of people whose first check was $320. The next was $4,000, and the next was $33,000. I’ve never seen anything like it.”

Distributor success stories are heartwarming for Potillo, because the company’s distributors comprise the most loyal family he has ever seen in the industry. He thinks that the key to their loyalty is two-way commitment and communications.

No Limits

Ardyss distributors span the demographics, from 18-year-old entrepreneurs to 80-year-old grandparents who still like to look and feel good.

“Since our primary product line is reshaping garments, you’d think the business would appeal mainly to women,” Potillo says. “But in the last six months, we’ve seen a surge of men getting involved because of our men’s product line and the nutrition products. We recently had a conference call that had 4,000 men on it. We’re excited to see husbands and single men joining on their own and getting excited about Ardyss simply because of the extraordinary income it creates and the end result it gives people. No matter whether you’re talking about a man or a woman, everyone wants a self-esteem boost. It’s a big market.”

To ensure that it can support such life-changing growth, Ardyss recently completed a multimillion-dollar warehouse and distribution system to ensure effortless, on-time, errorless shipping. It increased its U.S. support and customer-service staff from just 15 to about 150 and expanded facilities in Las Vegas from 15,000 to 100,000 square feet. It continues to invest in its product line—the first reshaping garment in the network marketing industry—because it believes the product is second to none. Ardyss wants to maintain the company’s family-focused culture as it expands internationally.

Ardyss is planning for two types of expansion. Its business in the United States is centralized in major cities. It currently sees a growth surge in Atlanta, Houston and Dallas, and it has large markets in Miami, Chicago, Los Angeles and New York. As the business starts to pop in those areas, distributors expand their business into rural areas as they spread the word about BodyMagic’s instant results and income opportunity.

“We want to take that philosophy and change people’s lives in the Caribbean, Central and South America and Asia,” Potillo says. “We have a systematic game plan over a period of years to penetrate markets globally with our one-of-a-kind product.” He adds, “This is our 20-year anniversary. We plan to be around for another 20 years and then for 20 more after that. The company is family-owned, and the Díaz de Leóns want to pass it from generation to generation. We want to do the same thing for our distributors—create a strong business that they can pass to their next generations.”

BODY-MAGIC.jpgBoosting Self-Esteem and Income

In 1989, Antonio Díaz de León lost his job as a Mexican government official. It was a turning point for the 50-year-old man that opened the door for his pent-up entrepreneurialism. body magic

What would he do to provide for his family? He had no idea. But he had always wanted his own business, and he also wanted to help a lot of people.

One day, while he was driving, he noticed a group of women walking, and he offered them a ride. As they drove through the Mexican streets, he asked them, “Why are you walking instead of taking public transportation?” The women told them that they were teachers, but their incomes were so low that using public transportation would literally cost half their salaries. If they didn’t walk, they wouldn’t be able to provide for their families.

Since Díaz de León was trying to figure out how to provide for his own family, he empathized. He asked the women whether they had part-time jobs to help them earn extra money. One mentioned that she sold beauty products, and that sparked an idea: Díaz de León could create a company that would provide people with the part-time income they needed to support their families.

Camiseta-Abdomen.jpgBut what kind of company would it be? He began brainstorming his idea with his physician brother and another good friend who was an orthopedist. As they talked, they all realized that they had a passion for boosting self-esteem and for helping people look better on the outside as well as feel better on the inside. Could they create something that would give someone an instant self-esteem boost?

The doctors believed that if they could create a product that improved posture, helped hold shoulders back and reshaped the body over time by keeping it in the proper position, their device could form the foundation for a profitable company that could catapult consumer self-satisfaction to a high level. From that concept came the first BodyMagic reshaping garments.
Díaz de León convinced his whole family to get into the act, and together they got involved in the garments’ design and production. By 1991, Ardyss was in business. The family packed and shipped products from their home, but before long, the business was able to move into its own facilities.

Today, Ardyss does business in five countries and territories and is still run by the family—Antonio Díaz de León; his wife Armida Fonseca; their oldest son, Antonio Jr. and his wife, Karina; and the youngest son, Alejandro, and his wife, Elvia. They lead a team of engineers, doctors, cosmetologists, nutritionists and others who support Díaz de León’s dream of boosting self-esteem and helping people provide for their families.

Filed Under: Daily News

A Passion for Fashion

November 2, 2009 by DSN Staff Leave a Comment

Young Company Focus

Stella & Dot Founder and CEO Jessica Herrin, Chairman Mike Lohner and Chief Creative Officer Blythe HarrisVibrant, new jewelry company Stella & Dot is rocking the direct selling industry with its unique brand of business.

Passion is the glue that holds us together. If you think about it, passion is what truly makes life interesting. It drives us to pursue the otherwise impossible with wild abandon. It keeps us focused. It lights the fire deep within us and keeps us dedicated to moving forward. Overall, in the end, passion makes us whole.

Love is more fulfilling when it is married with passion, as are our leisurely pursuits. So why wouldn’t we want a career—where we spend most of our time every day—to be something that ignites great passion within us? These days, a growing group of women are finding that passion in a vibrant, young direct selling company.

“At Stella & Dot, we are about a lot more than irresistible jewelry,” says Jessica Herrin, Stella & Dot Founder and CEO. “We are a people company. We are about exceedingly personal service, a lot of business savvy and a healthy dose of passion.”

Bustform and jewelryA Modern-Day Mission

Steeped in tradition right down to the core, Stella & Dot derives its name from the founders’ grandmothers. It only seems fitting, since so much of their unique jewelry line has a distinctly vintage vibe. But the homage to what has been deemed by many to be “the greatest generation” doesn’t end there.

By their own definition, Stella & Dot is a company “inspired by and created for strong women.” The women of their grandmothers’ generation, “who crossed oceans, rolled up their sleeves, won the vote, raised kids, went off to work and still found time to bake,” would be proud of the accomplishments Stella & Dot has racked up in only two years.

“I know all the numbers. I’ve seen them from all the different companies,” says Stella & Dot Chairman Mike Lohner. “And what’s so gratifying to me is that even in this early stage in our company, when we have only just begun to implement some of the exciting things we are planning for the future, our people are having more success than anything I have ever seen.”

Above all else, family comes first to the leaders of Stella & Dot. As a devoted mother of two young girls, Herrin likes to say she is a “mom working” instead of a working mom. And it is women like her—who want to redefine their role in the workplace—who she had in mind when she set out to create Stella & Dot. “We never endeavored to make a business work for people who don’t want to work,” she says. “But we always endeavored to make a business that would work when you did.”

However much the days of old influence the very essence of Stella & Dot, it is, without doubt, a modern, forward-thinking company. “Today’s woman is different,” Herrin says. “She is educated. She most likely had a career before having children, and now she may be looking for something that is more flexible and has balance, but something that is still a replacement for what was an exciting career—something that is intellectually challenging and exciting and has a growth opportunity in it.”

SDFLowers-neckalce-s-copy.jpgDifferent by Design

The key to Stella & Dot’s unique brand of success may be linked to their seasoned management team and its diverse business background. To begin with, this is not Herrin’s first foray into startup territory. She founded several successful businesses before envisioning Stella & Dot, not the least of which is WeddingChannel.com. Running the wildly successful Web site gave Herrin the Internet savvy and essential e-commerce experience that promises to make Stella & Dot a major player in the online arena.

Another asset—call it a gift—is that Herrin knows the power of a good partnership. She has teamed up with a dynamic pair of accomplished leaders whose varied skills complement her own.
Before coming to Stella & Dot, Mike Lohner was the CEO of a well-respected, billion-dollar party-plan company. He was also on the board of the Direct Selling Association, so this venture was a natural fit for him. His many years of experience have played a huge role in the “stylist first” mentality at Stella & Dot.

“Our inspiration, our muse, is the modern on-the-go woman who needs versatility and style,” Herrin says. “It’s someone who wants to take jeans—the modern woman’s uniform—and make it ‘Wow!’ And in order to deliver on that mission, I knew I had to partner with the very best creative genius out there. And within two minutes of meeting Blythe Harris, I knew she was the one.”
For her part, Chief Creative Officer Blythe Harris earned her stripes working with some of the most esteemed names in the retail jewelry business, such as Cartier and DeBeers. And she has studied jewelry design in India, Mexico and at Parsons Design School in Paris.

“Above everything else, there was one main thing that really clinched me joining this company,” Harris says. “What was really moving to me was Jessica’s mission to give women an opportunity to be entrepreneurs, but to not kill themselves like she did working seven days a week, 24 hours a day for years to found a business.”

B1002SM.jpgFashion Forward

Harris is indeed a big part of what makes Stella & Dot so successful. Her designs are fresh and innovative, and at the same time classic and timeless. “First and foremost, every product that we do at Stella & Dot needs to be irresistible,” she says. “It needs to have what I like to call the ‘wow factor,’ meaning, you put this piece on, and it transforms an old black dress into an amazing moment where you walk into a room and all your friends ask where you got that necklace. It’s a real show-stopper.”

Everywhere you look, Stella & Dot is making a name for itself. Much to its credit, Stella & Dot jewelry has garnered some very favorable attention in the cutthroat world of fashion. A-list celebrities have regularly donned their jewelry, and the media has taken notice. In Style, Lucky and O Magazine as well as The View and The Today Show have all featured and sung the praises of Stella & Dot products.

The overriding appeal seems to be the line’s down-to-earth, go-anywhere quality. “I want you to be able to wear all of our jewelry from the soccer sidelines, to a cocktail party, to your sister’s wedding,” Harris says.

B811R-1.jpgThe Sky’s the Limit

With their whimsical style and decidedly feminine flair, Stella & Dot is attracting a whole new generation of women to the direct selling industry.

“You set the pace; you control your destiny,” Herrin says. “You decide when to promote yourself, so that you not only love what you do, you love your life. It is truly up to you. It’s the feeling of never watching the clock, and never bumping up against the glass ceiling.”

For several decades now, women have felt a growing frustration with corporate America. The struggle for survival and equality in a male-dominated world has left many searching for a better way. Direct selling is especially ideal for women, because they can experience freedom, flexibility and success like nowhere else.

“What makes me most proud and enthused about Stella & Dot is the success of our stylists,” Lohner says. “These women from all walks of life, from all locations, from all backgrounds, are having more success than even they dreamed possible, and I guess, in a way, it probably wasn’t possible before Stella & Dot. And that’s what makes it so exciting.”

The Party Life

Part of the allure of Stella & Dot is that they have tapped into a vital need that women have to bond with one another on a meaningful level. “At our trunk shows, women can connect with their girlfriends; they relax,” Herrin says. “They get that ‘me’ time. They actually get to rediscover connecting with each other and shopping together. Somehow, life gets busy and we just don’t do that anymore, but it’s a lot of fun. You get their trusted opinion right there. It’s just a great way to spend a little you time.”

While the direct selling model is a new concept to some joining the ranks of Stella & Dot, it does seem to be a good fit, right from the start. “You can build a team, and by coaching them to success, you can earn coaching commissions,” Herrin says. “So your business is not just about you, but it’s about helping other people, and it’s an amazing way to earn an income.”

The women of Stella & Dot have thrived in such a nurturing environment, and undoubtedly will continue to do so. “When you are passionate about something, it hardly feels like work,” Herrin says. “At Stella & Dot, we are about helping people find that passion. So, whether they want to do it part time or full time, it is really on their terms, and it is something that they are proud of, that they are passionate about, that they absolutely love.” 

Filed Under: Daily News

Offering Hope through Comfort

November 2, 2009 by Lauri Dodd Leave a Comment

Private Quarters

PQ-Corporate-Staff.jpg

In their own unique way, Private Quarters is helping women in need sleep a little easier.

For the first time in years, she finally felt safe. Had it not been for the darkness all around her, you would’ve seen her visibly relax and even the slightest hint of a smile.

In an instant, everything had changed for Missy and her young son, Max. She was at a crossroads, and had taken a brave step forward. Looking back, she certainly never thought she would find herself in a battered women’s shelter in need of a helping hand. Who knows what turns life will take?

Somehow, she just knew life would be better now. Although in this moment, exactly what it was that had given her this newfound hope, she couldn’t quite say.

Maybe it was the small team of friendly faces who welcomed her earlier that day and stood ready to help her adjust to her new surroundings. Maybe it was the relief of knowing that she and Max were out of harm’s way. Or just maybe it was something as simple as the brand-new velvety soft comforter that swaddled her in safety.

It’s funny how something that seems so commonplace to one person can signify a turning point for someone else. That is just what this day had become for Missy and Max. And so now, surrounded by these people who would never know how much they had helped her, Missy felt overwhelmed with emotion. More than anything else—she had hope.

towels

A Mission Begins

It’s for women like Missy that the people of Private Quarters do what they do. The young direct selling company offers high-quality bed and bath linens and accessories. A couple of years ago, as they were making plans to ramp up for the next product season, the executive team realized they had a problem.

They had a surplus of brand-new, perfectly good items that had not been sold—that needed to be cleared out to make room for the next year’s products. As the group brainstormed ideas, one suggestion won the hearts of the entire room.

“When we considered the range of products we had to offer, such as bed linens and pillows, the idea of donating these things to battered and homeless women’s shelters seemed like a perfect match,” says Jeff Stroud, President, COO and Co-Founder of Private Quarters. “Very few organizations need those particular items more than shelters do. And it allowed us the opportunity to start a program where we could feel good about giving back to the community—that our consultants could participate in across the country. So it was a win-win situation for everyone.”

Private Quarters' Comfortwear

Helping Our Neighbors

The Private Quarters Share the Comfort program is indeed unique, much different from the typical giving campaign. That’s because Share the Comfort is truly a nationwide effort. Consultants who host parties that earn more than $500 get to choose a shelter in their local area that will benefit. The corporate office then takes products equaling 15 percent of the proceeds from that party and donates them to the chosen shelter.

It is an authentic grass-roots effort that gives consultants an opportunity to help people in need right in their own backyard. It helps put a face on the problem of domestic violence and has had a much greater effect than if the products were shipped off to some faraway place.

“Our leaders get to meet with the people at the shelter and in some cases get to unpack the boxes and help to distribute the donated bedding and linens throughout the facility,” Stroud says. “It gives them a chance to see firsthand how their work is making a difference in the lives of others.”

Shipping thousands of dollars’ worth of products to different locations throughout the country is no small task. It creates a lot of extra effort for the corporate office, but they welcome the work. “We would not have it any other way,” Stroud says. “It’s worth the effort for our leaders to know what shelter they are working for when they have these parties. We believe that one-on-one interaction can help establish a bond that will last a lifetime.”

No Better Time

The timing of the Share the Comfort program could not have been better. Whenever the economy takes a turn for the worse, the incidence of domestic violence begins to rise sharply. And now is no different. Unfortunately, there are more people who need help than ever, and fewer resources available to provide those services.

Without a doubt, shelter employees are feeling the strain, having to do more with less. “Shelter programs are overwhelmed right now,” says Sue Coats, Executive Director of Turning Point, a women’s shelter in Michigan. “The donations from Private Quarters have really been a welcome sight for us—very much appreciated; we can’t thank them enough for all they have done. We can only hope that others out there follow their lead.”

The positive effects are being felt across the country in communities big and small. “By allowing their consultants to choose a local shelter for their donations, this program has given us an opportunity to educate people in our own community about the widespread problem of domestic violence,” Coats says. “As a result, not only have we been able to increase awareness,
but we also have a new group of people interested in helping out, and now we can bring these people in and involve them in long-term solutions.”

Jeff Stroud, Co-founder, President and COO of Private Quarters.

Leading the Way

Private Quarters consultants have really latched on to this program and responded in a bigger way than the corporate team could have imagined. In only two years since it has been up and running, the company has donated $100,000 worth of product to shelters across the nation.

While some of the outcomes were obvious right from the start—like a boost in sales, growing businesses and bigger bonuses for consultants—there were also a few surprises that have been an added benefit to all involved.

“Share the Comfort gives consultants a sense of pride in their company—that it is not all about money or being successful,” Stroud says. “These are all good things that we have been able to accomplish with the Share the Comfort program. And people want to support a company that empowers them to do good things.”

Jeff Stroud, performing a specially written song at Private Quarters’ national convention.

Singing Their Praises

Before he became a co-founder of a leading direct selling company, Stroud was a music major in college. As he saw the benefits of the Share the Comfort program stack up, he was moved to respond in the best way he knew how.

“This is a very emotional issue, and I felt like it deserved an emotional response,” Stroud says. “I still compose music on the side as a hobby, and I was inspired to write songs to honor the women who are struggling to start new lives for themselves and their families.”

As he perused the lengthy list of local shelters that each consultant wanted to help, two names stood out to Stroud: Hope’s Door in Texas and Turning Point in Michigan. He set out to write songs with those themes in mind. “I wanted to highlight the transformation that happens when a woman makes positive steps to change her life for the better,” he says. “I want her to know she is not alone. There are a lot of people out there who care and are willing to help.”

Private Quarters has a growing number of consultants who have raised thousands of dollars for the Share the Comfort program, and the corporate team wanted to recognize their efforts. “We induct the leaders who have done the most to help others into the Founder’s Circle,” Stroud says. “And it is just another way to let them know we appreciate all they do.”

At the national convention last year, Stroud invited the Founder’s Circle members up on stage, along with the Executive Director of Hope’s Door, to dedicate his new song and video in a moving tribute. “There were a lot of tears and a lot of emotion,” he says.

This year, Turning Point took top honors, and Sue Coats was thrilled to be a part of the festivities. “It was uplifting to hear the song inspired by our agency and to see so many people take up the cause of helping women,” she says. “It was an experience I will never forget.”

Empowering Effects

Statistics say that one in three women will be affected by domestic violence. The toll it takes on their lives is enormous. And whether we realize it or not, the effects extend beyond the individual woman and her family. “Domestic violence is a communitywide concern,” Coats says. “We all need to do what we can to help each other bring an end to the problem. When a woman comes to us, the only space she has to herself here is her bed. By making it luxurious, she can have something to feel proud of—to call her very own.”

Most of the time, people give used blankets, sheets and towels to shelters, which is appreciated, but in the past couple of years, Private Quarters has really raised the bar when it comes to donations. “We have been spoiled by the items Private Quarters has given us,” Coats says. “These are high-quality bed linens that we would never have access to otherwise. Our women get to have something nice and be pampered a little bit. And it is a great feeling for us to be able to see them smile.”
In fact, Share the Comfort has been responsible for donating so much that, in many cases, there is an excess that is put to good use. “We have been able to give sheets, towels and blankets to women as gifts when they leave the shelter to start a new life on their own,” Coats says.

Even Coats, who has dedicated her life and career to helping others, never ceases to be amazed. “One woman told me a few years ago that she was having the best Christmas she had ever had,” she says. “And it seemed a little surreal at the time, since we were celebrating the holiday in a shelter, but she had never had someone take care of her like we were able to that day. It proved to me that the little things really do mean so much.”

The Share the Comfort program has grown phenomenally over the past two years and shows no signs of slowing down. “After all that these women have been through, we are happy to be able to help in our own small way,” Stroud says. “That we might be able to help them get a good night’s sleep is such a wonderful thing, and we are so honored to play a part in that.”

 

Filed Under: Feature Articles Tagged With: Direct Selling, DSN, Jeff Stroud, Max, Missy, Multi-Level Marketing, Private Quarters

Big Help for Small Business

November 2, 2009 by DSN Staff Leave a Comment

Top Desk

Scentsy’s Contribute 2009 Stimulates Local Economies

Micro-entrepreneurs understand the power of the personal connection. In today’s increasingly detached, virtual marketplace, the opportunity to do business face to face with someone we know and trust has become more meaningful than ever.

The direct selling industry is made up of small local businesses by definition—what could be more local than person to person? And, thanks to the Direct Selling Association (DSA), independent sellers have the best of both worlds; we can keep our micro-enterprise focus and still enjoy the benefits, credibility, resources and support of an international industry organization.

Buying Local Is Good Business

In tough times, small, family-owned businesses are usually the ones most at risk. However, it is typically small businesses—and the strong local economies supporting them—that lead the way to economic recovery. According to the American Independent Business Alliance, every dollar spent with a local independent merchant returns three or more times as much to the local economy as a dollar spent at a chain-owned business. That’s because those local dollars keep circulating in the community. Small businesses are more likely to buy from local suppliers, hire local service providers, and contribute to local charities and causes. Locally owned businesses also tend to provide jobs that stay in the community.

Rallying to support local businesses is a win for everyone involved: Customers get quality goods and services from merchants who understand their unique needs and preferences. Community ties are strengthened, family-owned businesses carry on their legacies, and the entrepreneurial spirit flourishes.

But the aspects of buying local that seem to appeal most to consumers are the intangibles. Retailers know their names. They get special treatment instead of “one-size-fits-all” goods. And, perhaps most important, they feel the satisfaction of knowing every purchase they make is appreciated.

We each have much more influence than we often realize when it comes to our choices about how we use our purchasing power. As individuals, our $25 here and $50 there might not seem like much. But what if thousands of Americans were to spend an extra $50 at a locally owned small business, wherever they lived, on or about the same day? Can you imagine the powerful ripple effect it would have on local economies and communities all across the country?

That’s exactly what Scentsy’s Contribute 2009: Big Help for Small Business campaign is working to accomplish.

The goal was to inspire 100,000 people to pledge to spend $50 or more at locally owned small businesses in their community beginning Oct. 12, 2009.  We also asked everyone who signed up to invite friends and family members to join them, for an even greater impact.

How Contribute 2009 Began

Contribute 2009 grew out of a novel idea for celebrating Scentsy’s fifth anniversary. When my wife, Heidi, and I launched the company in 2004, we based our business philosophy on a quote from Albert Einstein that has always inspired me: “Try not to become a man of success. Rather, become a man of value. A successful man takes out of life more than he puts in. A man of value will give more than he receives.”

In just five years, the rewards of honoring this philosophy have surpassed anything we expected, thanks in large part to our hardworking employees, passionate Scentsy consultants and our involvement in the DSA.

So, instead of throwing a big party in some exotic location, the Scentsy “family” decided to do things differently. We celebrated by putting the “contribute more than you take” principle into action, right here in our community.

We distributed a total of $100,000 among nearly 1,000 employees, suppliers and their family members, and asked them to spend it in $50 increments at small, locally owned businesses here in Idaho’s Treasure Valley.

We chose 40 businesses based on employee nominations, and on Saturday, July 18, the Scentsy teams went out shopping in groups, so that each business benefited from at least $2,500 in additional sales that day. It was our way of expressing gratitude for the tremendous growth and prosperity Scentsy has enjoyed over the past five years.

The event impact was greater than we could have imagined. In addition to what we gave them, Scentsy employees spent more than $10,000 of their own money and asked how they could do even more. Business owners skeptical at the beginning were surprised and glad to discover that there were no strings attached, and that our day of buying local was the real thing and not some kind of publicity gimmick. Some owners were in tears. Others said that it was thanks to our buy-local day that they were going to be able to make it through the summer.

But the comment that best summed up the business community’s reaction came from this Boise business owner.

Because of your generosity with your employees, not only did we have one of our most successful days, but there was also a great sense of community. I truly think what comes around goes around, and I’m sure that you’ll see continued success in your business. We can only hope that we can turn around and carry forward the same way to show appreciation to our community and customers.

The response of business owners, employees and even the public was so enthusiastic that we realized our simple idea had the potential to make a powerful difference in communities all across the country.

That’s when Contribute 2009 was born.

How the Program Works

Contribute 2009 is not a “give back” program, where you donate money to a cause or charity. Instead, it is a “contribute more than you take” program.

If you purchase something for $50, you receive $50 in goods or services. If, however, you spend that $50 alongside others in a united effort, you deliver hope to family-owned businesses that need more than economic stimulus; they need support, encouragement and publicity. Someone spending $50 for a pair of shoes, for example, is an isolated occurrence without much effect. But when five people buy $50 shoes at the same time and 100,000 other people across the country are doing the same thing, it makes news, it provides hope, and it stimulates future sales for the local economy.

The Contribute 2009 program is simple, and anyone can take part. To participate, visit http://www.scentsycontribute.org and fill in the brief pledge form. Then, on Oct. 12 (or any day afterward), join with others in your neighborhood to spend an extra $50 dollars each with a locally owned small business that could use your support. That’s all there is to it. Contribute 2009 operates on the honor system—participants are not required to provide any receipts or documentation.

The Power of Working Together

Small businesses are at-risk in today’s economic reality. But we can each take one simple, personal step to make a difference, and by taking that step together, we can magnify the ripple effect of our actions. I invite you to visit http://www.scentsycontribute.org and pledge today.

By spending as little as $50 at a local small business and encouraging others to do the same, we can spread hope and collectively contribute to lives and livelihoods right where we live, work and raise our families, supporting the business owners who support our businesses.


Orville ThompsonOrville Thompson is Founder and CEO of Scentsy Inc.

Filed Under: Feature Articles

Target the Right Behaviors with Bedrock Compensation Principles

October 2, 2009 by DSN Staff Leave a Comment

Target the Right Behaviors with Bedrock Compensation Principles

I have a good friend who has a hobby—well, more like a single-minded passion—for target shooting. As I’ve watched him over the years, I’ve often thought how MLM compensation plans are like target shooting. To make the analogy work for network marketing, picture a side-by-side double-barreled shotgun and two targets—one for enrollers and the other for sales leaders.

Why two targets? Because there are two activities every compensation plan has to reward—that of enrollers and sales leaders.

Enrollers

Let’s first talk about enrollers. It’s important to understand who enrolls people. We also need to know what enrollers do and why they are so crucial.

Most of your field (about 65 percent) won’t enroll anyone; they are your customers. Then, there are your social enrollers (around 30 percent of your field), who enroll between one and four people. They enroll within their social circle. Finally, there are your professional enrollers (5 percent of your field) who are “enrolling machines” that bring in five or more people. What this boils down to is this: 1) the professional enrollers bring in 43 percent of your new people; and 2) the social enrollers bring in 57 percent.

The target or purpose of enrollers is to enroll as many people as possible—a specific skill that is different from that of sales leaders. The act of enrolling consumers is an end unto itself for the enrollers—social and professional.

The best social enrollers are like the people who go to movies and then tell all their friends about it, and their motivation is much the same. The two reasons people tell you about a movie are: 1) they like the movie, and 2) the movie theater was full—this is the social feedback they receive on their decision. Their activity is very much driven by noting how full the movie theater was. Social enrollers need this same kind of feedback. They check, “Is this company on the move?” or “Is there real excitement?” In a company where the excitement is fading or waning, the social enrollers pull back.

The professional enrollers create the excitement. They are very important because they enroll the most people per capita. However, they impact more than just the 43 percent of the people enrolled. Although that percentage is truly valued by the company, these enrollers have an importance far beyond that because they affect the attitude and, therefore, the actions of the social enrollers. The company needs this symbiotic relationship between the social and professional enrollers.

Sales Leaders

Top sales leaders, on the other hand, have a completely different target in mind. They strategically view the enrolling process as a means to an end. What is that end? To create their downline organizations with the intent of building their business. Their skills are very different from the enrollers’ skills because sales leaders are enrolling people they think will help build their downline.

You may ask, “How many distributors do top sales leaders enroll?” The answer is, as many as they need; this might be 50 for one sales leader or five for another. I’ve looked at this kind of data my whole life, and it’s impossible to distinguish top sales leaders by the number of people they enroll.

At first glance, the number of people top enrollers and top sales leaders enroll often look similar, but they have nothing to do with each other. Top enrollers must enroll lots of people, whereas top sales leaders only need to enroll a handful of people.

There are two types of sales leaders, but the number of people they enroll is not a distinguishing factor between them. These two types are: 1) those who build a downline with a tactical, in-the-trenches work ethic, and 2) those who are very good at painting the dream—often referred to as dream builders.

Customizing Compensation

Over the last 30 years, the problem most MLM companies struggle with is how to incentivize both the enrollers and the sales leaders target groups. This leads to my bedrock principles of compensation plans, whose premise is, “If you don’t find a way to compensate the behaviors of both groups, then you diminish your chance for success.” Compensation plans are a means to achieve this.

If that’s so, then “Which compensation plan best pays both groups?” The answer is: “None of them do!”

This is why hybrid compensation plans are so important. To hit both target groups at once, you have to combine commission types to incentivize both kinds of distributors. Successful compensation plans will always aim at both enrollers and sales leaders. At this point, you might ask, “Is it really possible to ‘fine-tune’ my compensation plan to improve the behavior of both groups?” Absolutely!

The magic comes when you can create a compensation plan that both your professional enrollers and sales leaders can really get excited about and communicate to the field. What is essential in that message is how leaders get rewarded within each target group.

Those of you who already have your compensation plan percentage allocated may ask, “What good does this do for me?” The fact of the matter is, when you pick a compensation plan like a hybrid-binary or a hybrid-unilevel, you have just spent 80 percent of your compensation plan dollars. Companies that really target do it with the last 20 percent of their compensation dollars. Between 5 and 10 percent of your compensation money is really the differentiating factor. It’s how you spend these final percentage points that can create the magic. It’s the qualifications or the matching bonus you place or the little tweaks and fine-tuning you do to make sure this last 5 to 10 percent goes into the hands of your people.

Just like with my target-shooting friend, those last little adjustments make the real difference between hitting the target or not. Those little changes to account for weight of ammunition, temperature, humidity and wind speed really do matter. A few percentage points in qualifications, how those qualifications are set up and how they focus on that target, become the difference between hitting the mark—creating the right behavior with just the right compensation plan principles—or not.

This ought to matter to you. Why? Between 35 and 50 percent of all revenue is earmarked to pay commissions in this $100 billion industry! That’s a lot of cash! Therefore, making sense of your compensation plan and targeting the right behaviors distinguishes the champions from those just getting by.


Mark RawlingsMark Rawlins is CEO of InfoTrax Systems.

Filed Under: Working Smart

It’s a Jungle Out There Part 1

October 1, 2009 by DSN Staff Leave a Comment

Working Smart

Protecting Your Name on the Internet

Are you protected?
Do you know what dangers lurk on the Internet jungle?

Direct sellers face unique challenges because their salesforces operate outside the controlled office environment and often on the Internet. These challenges include the use of unauthorized distribution channels, such as eBay; employing inaccurate marketing material; and using your intellectual property without permission. Unchecked, these challenges become significant business risks, diluting your brand and creating turmoil within your independent salesforce. The unauthorized use of your intellectual property, as well as unauthorized Internet sales, damages your reputation, erodes the value of your trademarks and, most important, exposes your company to liability. The Internet is a jungle, and this article explains how to protect your company’s brand in the wilds of the Web.

Most direct sellers copyright their advertising materials, recruitment aids and other marketing collateral. Many even include language in their independent contractor agreements that restricts the unauthorized use of their intellectual property. Others include language prohibiting their salesforce from selling their products via non-sponsored Web sites and auction sites, like eBay.

These are important first steps, but they’re not enough to safeguard your brand and intellectual property from unauthorized dealers, rogue salesforce members and unscrupulous individuals seeking to exploit your good name for their profit. The Internet poses a whole-new set of challenges, requiring vigilant monitoring for violations of your distribution agreements and the unauthorized use of your intellectual property. Here are some of the most common problems facing direct selling companies:

Problem No. 1: Infringement of Your Intellectual Property

Anyone armed with a mouse and a word processor can use the “copy” and “paste” functions to copy your marketing materials and copyrighted photographs. A few quick revisions, and your hard work becomes a weapon to steal your sales and customers. These unethical vendors prey on confused consumers.

They use your marketing materials to pass themselves and their products off as yours at much lower prices. In the process, you lose sales. Those lost sales demoralize your distribution network and anger your consumers after they discover they purchased inferior, defective or expired products. Both federal and state law prohibits the use of your copyrighted sales materials by a competitor. The law also restricts competitors from passing off your products as their own. In both cases, however, you must identify and aggressively police such behavior on the Internet to prevent its occurrence.

Problem No. 2: Siphoning Sales by the Use of Metatags and Keywords

Worse yet, some of these same unauthorized dealers leverage your brand, trademarks and reputation to steal your consumers. Consumers routinely use a major Internet search engine, like Google, Yahoo or MSN, to find your Web site among the millions on the Internet. Manipulative Web site designers add metatags or buy keywords to focus search engines to their sites and away from yours. While metatags and keywords were created to make the Internet run more smoothly, some dishonest competitors now use them to hijack your company’s name and trademarks. In such cases, your competitor’s Web site may show up higher on the search results than your own, or they may appear as a “sponsored link,” even when the consumer attempted to reach you.

Fortunately, both federal and state law prevents this type of unfair competition.

Your competitors cannot use your trademarks or claim “affiliation” in a manner that is likely to confuse consumers. Using your trade name and trademarks to divert Internet traffic causes confusion and gives rise to liability under federal and state law. This is true when these dealers attempt to “disclaim” association, and even when no sales result from their illegal behavior. The reason is simple: Potential customers surfing the Internet may be diverted to your competitor’s Web site, never returning to yours.

Problem No. 3: “Liquidators” and Auction Web sites

“Discount liquidators” sell old, expired or discontinued products, often obtained by enticing salesforce members to breach their contractual agreements. Liquidators then sell your products en masse on various auction Web sites, like eBay, again at big discounts and without any warranty. This tarnishes your brand, demoralizes your salesforce and exposes you to liability. The unauthorized products sold on eBay may be expired or used, and may have been put on the market by disgruntled distributors wanting to unload product in violation of their contractual agreements. In all cases, unauthorized sales confuse consumers and demoralize your salesforce. eBay and most other auction Web sites offer programs to help companies police intellectual property violations on the auction sites. These programs are a good first step, but without a comprehensive follow-up strategy, you can become mired in a never-ending game of “whack-a-mole.” Furthermore, the auction site assistance programs will not halt the activity, protect your name and satisfy your salesforce. Fortunately, both federal and state law arms you with the weapons that will. Doing nothing to stop unauthorized Internet sales is not an option. You must protect your brand.

Problem No. 4: Inaccurate & Misleading Claims about Your Products & Services

Direct sellers must police the Internet for improper and unauthorized statements made by overzealous salesforce members. With thousands of independent sales associates, some are bound to go too far, resulting in marketing material that is at best unapproved, and at worst fraudulent. Although most salesforce members are independent contractors, both federal and state law holds direct sellers liable for false or misleading representations made by salesforce members. If unabated, such statements can expose direct sellers to attorney general investigations, fines and other more serious penalties.

Problem No. 5: Bloggers

You can’t make everybody happy all the time. Whether it is a dissatisfied customer, unhappy salesforce member or disgruntled former employee, Internet blogs have given rise to an unprecedented ability to broadcast any complaint—no matter how petty—directly to the masses. Whether the words bloggers write are ever read or given any credence remains uncertain, but one thing is certain: Their words are out there for everyone to read at any time. As a result, you must crawl the Web daily to monitor what is being said about you—the good and, more important, the bad.

Comprehensive Plan of Attack

Your intellectual property, brand and reputation are your most valuable assets, second only to your relationship with your salesforce and your distribution network. Direct sellers must implement best practices to protect their trademarks, intellectual property and reputation from erosion on the Internet. You need a brand-protection game plan, and aggressively execute it to protect your valuable assets on the Internet.

As Benjamin Franklin said, “Glass, china and reputation are easily cracked, and never well-mended.”

In an upcoming article, we’ll walk you through courses of action you can take when faced with a wild situation on the Internet jungle. You have rights! The steps are simple, and when followed, you will see results.


 Eric PinkerTrey CoxChris Schwagmann

Eric Pinker, Trey Cox and Chris Schwegmann are partners with Lynn
Tillotson Pinker & Cox, LLP. For more information, visit
www.lynnllp.com.

Filed Under: Working Smart

Our Defining Moment Is NOW

May 1, 2009 by Joseph Mariano Leave a Comment

When I interview a job candidate, I ask what, to me, is a most telling question: “What has been the defining moment of your life?”

It is, admittedly, not an easy question for many to answer, as an honest response requires some degree of introspection, intimacy and thoughtfulness—all things a candidate may not be prepared for in a job interview. After some hemming and hawing, I usually get one of three answers:

“I think it might be when I [insert some significant professional accomplishment here],” in which the candidate attempts to use the opportunity to sell me on why they are qualified for the position. It doesn’t normally work.

“I don’t know. I haven’t really thought about it.” Here the candidate is unwilling or unable to demonstrate any thoughtfulness deeper than curiosity about the salary for the job. This answer doesn’t usually work, either.

“Well, that’s a tough question. It may have been the time when…,” and the candidate begins to explore their past and how it has shaped the person they are today. The “defining moment” may be personal or professional, but, ultimately, it’s about a moment when the person was challenged emotionally, intellectually or spiritually. Invariably, the person who makes the best impression is the one who seized opportunity out of that defining moment, even when the circumstances were dire.

I think direct sellers are experiencing their “defining moment” right now. In fact, this might be such a moment for an entire generation. As a country, we’re faced with economic challenges unlike those we’ve seen for more than half a century. Yet, for those who are ready to act, now could be the hour of their greatest triumph. For direct sellers with the courage to step out of their comfort zone and spend those extra marketing dollars when dollars are scarce, look for innovative ways to inspire the salesforce, and continue building a balanced business that will ultimately stand the test of time, there is a potential that is almost unlimited, yet out of reach for many others. Direct sellers are perfectly positioned to sell themselves, their products and their opportunity, and provide the spark that can ignite the engine of commerce that pulls us out of the malaise. Our defining moment.

At the Direct Selling Association (DSA), we already see direct sellers beginning to embrace the moment. Some members are reporting upticks in recruitment and sales, as Americans and people around the world look for opportunities outside of the moribund employment market. Press coverage around the country (helped along by the work of your friendly neighborhood trade association) is focusing on direct selling as a way out of the recession, including features on the major networks. Well-known companies specializing in helping people find work (such as CareerBuilder.com and Women for Hire) are working with the DSA to offer companies extra opportunities to help their salesforce members recruit qualified sellers. Even government regulators have modified some recent proposals (remember the FTC’s business opportunity rule?) so as not to burden legitimate direct selling businesses that offer real opportunity to people who need alternatives. Individual companies are beginning to reach out and advertise their direct selling businesses as ways to help the family cope during bad times. (I just watched an impressive, credible infomercial produced by one of our biggest direct sellers that will air through the rest of the year.)

There are, of course, those who won’t embrace the moment. Perhaps they’ll retreat. They may choose to miss the opportunity. They may not pursue the press, data-gathering, government-
relations, global-expansion, educational and other opportunities that the DSA is helping to provide them. Perhaps they’ll not recognize the moment for what it is—a defining moment.

At a dinner among industry leaders back in October (as the world economic crisis deepened), one of the many dynamic, young direct selling industry CEOs shared her vision with me. Her company is going to pounce, to push its strategic advantage to convince women that direct selling is their way out of the confusion and uncertainty. She understands that now is the time to become even more involved with the image-enhancement, ethics and regulatory programs of the DSAs around the world. She understands that we need to strike now, while the iron is hot, to mold the future of direct selling. Now, while the rest of the business world is caught in the paroxysm of doubt and impossible credit. Now, while more staid business models and industrial behemoths are crumbling. Now, while people are struggling and looking for low-cost ways of earning extra income to keep their families afloat. Now is our moment, our defining moment.

If she were the one being interviewed by me, she would have gotten the job.

Filed Under: Feature Articles Tagged With: direct sales, direct sellers, Direct Selling, Direct Selling Association, Direct Selling News, DSA, DSN, MLM, Multi-Level Marketing

MXI Corp: Sweet Success

January 1, 2009 by DSN Staff Writer Leave a Comment

Chocolate is inarguably a longtime favorite for sweet snackers. But is it healthy? MXI Corp says yes, backing up its claim with hard science. The very phrase healthy chocolate seems oxymoronic, but MXI insists that their chocolate is not only delicious, but good for you, too.

Healthy Start

MXI Corp was founded in the spring of 2005 by the Brooks family, who actually started in chocolate for retail. Jeanette Brooks, Founder and President of MXI Corp, became pregnant in her 40s and developed gestational diabetes. The family went on a crusade to find good, sugar-free products for Jeanette, who adopted a low-carbohydrate diet, first espoused by Dr. Robert Atkins, to help her through pregnancy. While she could find lots to eat on the diet, she could not find anything to satisfy her sweet tooth.

“We all went on this low-carbohydrate diet, started looking at the products available and realized that there was a need,” says Andrew Brooks, Founder and Executive Vice President of Sales and Marketing at MXI Corp. “There was something missing—a sweet treat.”

Because of Jeanette’s diabetes, the Brooks retired from their retail business so Jeanette could care for herself and her newborn girl. However, their search for a healthier alternative to commercial sweets continued. In 1999, the family started a chocolate company, Pure De-lite™, which distributed Belgian, low-carbohydrate, sugar-free chocolates, and stayed with the traditional model they knew so well—retail.

MXI’s Reno, Nev., headquarters
MXI’s Reno, Nev., headquarters

The company itself was quite profitable, boasting accounts such as Wal-Mart, Rite Aid and GNC, with sales topping $300 million. But it did not satisfy the need for a healthier alternative, and it taught the family some important lessons.

“We did business with these retail giants, believing that retail was a better option for reintroducing a product,” Andrew says. “But we learned that retail is a very fickle market.”

Not only is retail capricious, but it also doesn’t help others build the lives they truly want to have. “Here’s the reality: You can choose to give 50 cents on the dollar to brokers, wholesalers, shelf stockers and demo companies to market your products, ” Andrew says. “We chose to pay thousands of our business owners to share our products, but it’s the same 50 cents on the dollar.”

According to Andrew, when Dr. Atkins died in 2004, the low-carb diet died with him. “He was the mouthpiece for all of our businesses, and there were dozens of low-carb businesses being driven by one single man, Robert Atkins,” Andrew says.

So the Brooks family began researching dark chocolate and developed a product that was low in carbohydrates and still sweet: a dark chocolate bar. “Dark chocolate is not the chocolate of choice in America,” Andrew says. “In Europe, it’s definitely a favorite chocolate product, but North Americans prefer milk chocolate.” After analyzing the marketplace and listening to consumers, the Brooks family realized that they had created a buzz around their chocolate bar, but not for the reasons they thought. The word-of-mouth held the key to their new company—the health benefits of dark chocolate combined with the açai berry.

In June 2005, the founders decided to leave retail for good and join the network marketing industry, focusing solely on healthy chocolate. “We started this journey with the Xoçai™ product,” Andrew says. “The Xo comes from chocolate, and çaí is from the açaí berry, a beautiful berry from Brazil. Unprocessed cacao and açai are the Nos. 1 and 2 antioxidants in the world.”

A Ready Market and Salesforce

Americans consume, on average, 12 pounds of chocolate per person per year, and the United States is 11th in chocolate consumption in the world, with Switzerland weighing in as No. 1. In tough economic times, chocolate intake increases by approximately 35 percent. In 2001, Americans ate 3 billion pounds of chocolate, totaling $13.1 billion in sales revenue.

“You don’t have to talk people into eating chocolate,” Jeanette says. “Chocolate is where it’s at for both health and wealth.”

After an interesting conversation with one of MXI’s main manufacturers in California, the company moved its focus from low-carb to healthy chocolate. “We set a goal that if we could sell $250,000 in healthy chocolate in our Xoçai products through network marketing in the first 60 days, we would give the opportunity to people,” Andrew says. “We said we would go back to our retail accounts and take the products away. At the end of the 60-day period, we sold more than $1.7 million in product.” The company also garnered its first, and founding, distributor, the selfsame manufacturer involved in the original discussion. To MXI’s credit, he remains with the company today.

But no network marketing company becomes successful without its share of pitfalls. MXI Corp faced its biggest challenge early on and learned from it. In an attempt to keep up with other network marketing companies, MXI tried to offer a healthy drink product made from high-antioxidant chocolate and açaí. The company was unable to create the drink without dangerous levels of preservatives—exactly what MXI was trying to avoid. “We couldn’t consider our product ‘healthy’ while adding preservatives,” Jeanette says. MXI’s drink offering was discontinued, and the company wound up paying distributors back for the product—to the tune of approximately $3 million.

For a company in its fourth year of business with $55 million in sales in 2008 alone, it was the right move. MXI Corp is a debt-free company in a 75,000-square-foot facility. “We control our own destiny,” Andrew says. “A lot of pre-launches in network marketing are trying to gather with investors to help capitalize it. We are family-owned—a privately owned and operated company. We do not have any outside debt, no bank loans, no lines of credit. We do not believe in debt, and that’s how we’ve managed our business. Having outside investors truly changes the course of your business, because you’re no longer able to make decisions for your company and its distributors. You have to make decisions based upon investors’ needs, who have different objectives and priorities.”

That ability to put distributors first has resulted in enviable retention rates. “The same 11 people who started with us are still with us,” Jeanette says. MXI Corp now boasts a more than 35 percent retention rate, and that’s just with customers. The company ships out more than 10,000 packages each week, directly to consumers’ doors.

The founders learned from their early mistakes and used those to build their business even more, always maintaining their primary focus on the product. “Hardly a day goes by that dark chocolate isn’t in the news,” Andrew says. “That has been the driving force behind our business. We focus on the product, and it’s been the science that has really driven our company.”

Distributor training centers on tools and simply asking people to try a bite. “We don’t create our consumer,” Andrew says. “What we have to create is awareness. We have to help people understand our philosophy—replacing the bad with the good.”

The company offers distributors Web sites, a magazine and other marketing tools as well as retaining a scientist on staff. “Dr. Steve Warren [a physician] makes sure that the science of what’s being shared is accurate,” Andrew says. “These products are science-based and have information to support them.” The MXI Corp Compliance Department oversees every distributor Web site to keep the company on top of what the salesforce says about the products.

MXI-product

Certified Sweet

Discovered by Mesoamerican cultures more than 3,000 years ago, chocolate, in its purest form, has been used for everything from a fertility drug to currency. The term chocolate is derived from the Aztec word xocolatl, which combines two Aztec terms—xocolli, meaning “bitter,” and atl, which means “water.”

MXI’s focus is on helping consumers trade the bad for the good, enabling them to have their sweets and eat them, too. They zeroed in on the No. 1 one sweet treat—chocolate—and made it guilt-free. The company even places the chocolate’s Brunswick Labs certification and ORAC seal on product packaging. ORAC stands for Oxygen Radical Absorbance Capacity, which measures the antioxidant levels in food. Antioxidants’ strength is in their ability to eliminate oxygen-free radicals. A higher ORAC score means that the food is better at helping humans fight diseases.

There are two types of chocolate—candy chocolate and functional chocolate. What’s the difference? “It has to do with the cacao bean selection, manufacturing processes and finished goods,” Jeanette says. “Carefully monitoring these components contributes to the ORAC score. All our products carry the Brunswick Labs certification seal, and they’re retested quarterly to ensure accuracy.”

Cacao beans contain the highest levels of antioxidants known to man. But a standard, off-the-shelf chocolate bar is anything but healthy. How can chocolate itself be healthy, but a chocolate bar isn’t? Andrew offers the answer: “Every time you do something to the cacao bean, you alter the antioxidant value, especially alkalization. If you alkalize chocolate, you destroy 70 to 80 percent of its antioxidant value.

“A good example is steaming vegetables. Although they may taste more palatable, you’ve destroyed some of their nutrients.”

Conventional, processed chocolate—the kind that appears in candy bars around the world—contains loads of unhealthy ingredients, including processed sugars, vegetable oils, waxes and fillers. MXI’s products are made from cold-pressed cocoa and freeze-dried açaí berries, protecting the natural antioxidants, and sweetened with raw cane juice crystals.

“We use sweeteners that are all low-glycemic, those that are not going to affect diabetics or those with pre-diabetic conditions,” Andrew says. “We understand the pain that too much sugar is causing in North America in terms of daily diets.”

MXI Corp is currently focusing on another product, Xobiotic Squares, which will be the company’s first probiotic offering, launching in February 2009. One in three Americans suffer from gastrointestinal dysfunction, creating an industry reported to be worth as much as $105 billion annually.

“We are extremely excited about this product,” Andrew says. “We have a major problem with our digestive systems because of our diet. They’re now showing that introducing these good probiotics, good microorganisms, neutralizes damaging bacteria, helping our systems work better. Clinical studies have been able to prove that chocolate is three times more effective in delivering these microorganisms than yogurt or dairy.”

Healthy Future

With its focus on replacing the bad with the good, MXI Corp sees a bright future for the company and its salesforce. “Chocolate is different,” Jeanette says. “It’s a feel-good, emotional product that people do not give up.” With its long history, chocolate will be around for many more years, offering more and more consumers a sweet treat.

“Yesterday, 1 billion people ate chocolate,” Jeanette says. “Today 1 billion people will eat chocolate, and tomorrow 1 billion people will eat chocolate. We don’t have to make up a story; it’s been there for 3,500 years.”

Filed Under: Feature Articles

Executive Connection with Jeff Stroud, Co-Founder, President, CEO, Private Quarters

November 1, 2008 by DSN Staff Leave a Comment

imageIn this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming spoke to Jeff Stroud, Founder and CEO, Private Quarters, about Private Quarters’ consultants, his  vision for the company and much more.

DSN: What is the one thing you enjoy most about being a top executive of Private Quarters?

JS: Seeing the lives of people change and helping people achieve their goals in a way that allows them to have complete freedom. There’s no glass ceiling, no waiting for someone to tell them they’ve got the promotion. They do it themselves. Do they want a promotion? They go out and earn it. They use that freedom to achieve their dreams.

DSN: What has been your greatest challenge since starting this company?

JS: To project and forecast the growth of the sales organization. When you’re running stores, you project growth by saying you’re going to open three stores next year then five the year after that. You have an element of control over it. In this business, consultants just recruit the number of people they want to recruit. You don’t know how many that will be or what direction it will grow, so it’s harder to control growth in that respect. Coming from a retail background, that’s been one of my biggest challenges.

DSN: How would you describe the ideal Private Quarters consultant?

JS: Someone who is open to discovering their full potential. In other words, someone who says, “I think I could be good at this and I want to find out how good I can be. I’m going to go for it!” That kind of person is the gold that comes into the organization. If they’re open to growth, discovering what their full potential is, that’s the first thing. Once they take hold of it and run with it, they can discover how high they can really go.

DSN: How involved are you with Private Quarters’ consultants?

JS: Very involved. I’m very close to what they’re thinking and feeling every day. I give out my email address, and I get emails from them all the time. I have a very hands-on approach. We always want to understand our consultants’ issues, problems, and challenges. That’s getting harder because the company is getting bigger, but it’s what I believe in.

DSN: What is your vision for Private Quarters?

JS: It’s a vision about changing people’s lives and allowing them to realize their goals and dreams. It’s been a delightful experience to meet these people and learn who they are and how the company is changing their lives. My vision is to open up the Private Quarters opportunity to more and more people, becoming a household name with our products and way of presenting them. We’ll be the dominant company, known for bed-and-bath products.

DSN: Is there one basic principle which has governed your leadership at Private Quarters?

JS: Believing in the best in people. We all know the story about the teacher who has the class in grade school and doesn’t believe in their abilities and potential. Guess what happens? None of them do well. As opposed to the teacher who comes into that same class and believes in their abilities and potential. Suddenly, those kids who weren’t doing so well before are doing better. A person who is an effective leader or coach expects and believes in their people’s potential. That’s always been my philosophy.

DSN: How do you communicate with your team?

JS: It’s very open door, very casual. Yet we do have discipline. We’re running a business. I communicate very directly with the staff. The staff gets to see the results when they see our national convention. Everyone understands our goals and mission.

DSN: Leaders usually draw on something or someone for inspiration, guidance and direction.  Do you have a hero or heroine?

JS: My dad, without a doubt. He was a man who essentially put everything on the line for what he believed in his business. He ended up doing very well. The values and principles he believed in made his business a success. He has always been a role model to me. Because he is gone now, there are a couple of people who have been almost like a father: Neil Offen and Alan Luce. They helped me understand the direct selling business and helped me every step of the way to make this dream a reality. They helped to shape the way I do business.

DSN: Which other direct selling company or person do you admire the most and why?

JS: Doris Christopher of The Pampered Chef. I’ve read both her books and look up to her in a number of ways. I think she is not only smart and shrewd with a great business sense, but also a terrific human being and a good person. I don’t know her all that well personally, but I really admire her and the way she runs her company.

DSN: What do you see as our industry’s greatest challenge?

JS: Because there are so many companies, we end up bumping into each other. We have lots of cross-pollenization that happens, partly because of the Internet. People used to find out about an opportunity from a person. Now people to go to the Internet. It will be a challenge to peacefully coexist alongside each other even though environment is competitive.

DSN: What is your favorite way to relax?

JS: Going to the Rose Bowl with my son to watch a college football game. I love college football. My family lives about four miles from the Rose Bowl. I went to college at UCLA, which plays home games at Rose Bowl. I love to go there on Saturday afternoon, have a hot dog, watch the game and relax. There’s nothing better.

DSN: When are you happiest?

JS: When I’m giving out the awards at our convention. It’s the most wonderful moment and the highlight of the year from a business perspective. Last year, we presented about 35 of our main awards to express the company’s gratitude for the winner’s achievement.

DSN: What is your favorite travel destination and why?

JS: Mexico. I love the beaches. I’ve been to Cancun, Cabo and other places. I love the whole deal—sipping a margarita with my toes in the sand!

Filed Under: Exclusive Interviews

Executive Connection with David and Bianca Lisonbee and Steve Tew, 4Life

October 1, 2008 by DSN Staff Leave a Comment

imageIn this month’s Executive Connection, Direct Selling News Publisher and Editor in Chief John Fleming spoke to David and Bianca Lisonbee, CEO and Co-founders, respectively, and Steve Tew, 4Life President, about 4Life’s inspiration, distributors and much more.

JF: What is the one thing you enjoy most about being a top executive of 4Life?

David Lisonbee: My greatest satisfaction comes from seeing people’s lives change for the better.

Bianca Lisonbee: Witnessing the positive changes brought about in people’s lives because of their involvement with the company and its products.

Steve Tew: Being able to travel to different parts of the world to see the positive impact 4Life has made in the lives of people. There is nothing more rewarding than to see a family whose lives have been changed for the better as a result of being a part of 4Life.

JF: What has been your greatest challenge since assuming this position?

David Lisonbee: Any company has significant challenges which can divert attention from the core focus. Keeping focus on what we do best is always a challenge.

Bianca Lisonbee: I think the biggest challenge came that first year when we were just getting started. We started with an amazing product, a big dream and no distributors! Those are the times that reveal just how much you believe in what you are doing. It is good to always think back on those times because it helps to keep us grateful for all those who have contributed to 4Life’s success and to remember that success, in this industry especially, is a team effort. It is also a good thing to remember how we got started because it is also the way that most distributors start their business. They have to build their organizations the same way we did—one person at a time.

Steve Tew: There is nothing more difficult than trying to keep up with our distributors and their desire to share the 4Life opportunity with people around the world. In just 10 short years, we have opened offices in 14 countries around the world which has provided some extremely unique challenges, as well as rewards.

JF: How would you describe the ideal 4Life distributor?

David Lisonbee: 4Life’s most successful distributors embrace the mission of “Together, Building People” by understanding they are only successful if others are successful.

Bianca Lisonbee: Enthusiastic about making a difference in people’s lives, visionary in seeing the unlimited potential they have as pioneers in the Transferceutical sciences and tireless in their efforts to achieve their goals.

Steve Tew: The ideal 4Life distributor is an individual whose values and goals are aligned with ours in terms of integrity, enthusiasm for the product and opportunity and who especially wants to help others share in this success.

JF: How involved are you with 4Life distributors?

David Lisonbee: We love our association with distributors and look forward being with them at as many events as possible.

Bianca Lisonbee: I feel very connected to the distributors by way of communication through writing, phone calls, trips, and speaking at events—and of course David and I get to dance with them at convention!

Steve Tew: I regularly speak with our distributors about specific challenges and opportunities before them. I also travel to many countries around the world to participate in meetings and events.

JF: What is your vision for 4Life?

David Lisonbee: We will continue to take the mission of 4Life to the world until everyone knows of the benefits of 4Life’s Transferceutical Science.

Bianca Lisonbee: 4Life will continue to establish itself as the company with the most cutting edge science behind its products, the most lucrative opportunity for financial success and distributors who are dedicated to building people. I believe the benefits of 4Life Transfer Factor and our work in the Transferceutical Sciences will become well known throughout the world.

Steve Tew: My vision is to continue to follow the path we are on by continuing to spread the 4Life opportunity around the world with those who share our dreams and our values.

JF: What is the most difficult decision you’ve had to make at 4Life?

David Lisonbee: When I understood the power of transfer factors, we had to decide to move forward and bring this product to market. That takes an incredible amount of commitment. Still, I knew the sacrifice would be worth the effort because of this amazing memory molecule’s impact on people around the world.

Bianca Lisonbee: When we were just getting started, someone suggested that we should make a “deal” with an experienced networker in the industry to help us recruit more distributors at a faster rate. We made a conscious decision not to do this. We wanted to grow a culture of distributors who were with us because they shared the vision and dream of what we were doing. Because of that decision, today we now have a very passionate group of distributors who share in our task of taking transfer to the world and or mission of “Together, Building People.”

Steve Tew: I don’t know that there is a single decision that stands out as being the most difficult decision, but one of the most challenging aspects of my job is to decide where to allocate company resources, especially as it relates to opening new markets. This is especially difficult when thinking about the impact such a decision has on the lives of people in these various markets.

JF: Is there one basic principle which has governed your leadership at 4Life?

David Lisonbee: We are in the business of building people, whether in our offices or in the field. Everything we do is focused on improving people.

Bianca Lisonbee: We believe that you need to figure out what you do best—recognize what you have to offer that no one else can, and then offer it with great passion, integrity, and love.

Steve Tew: The underlying philosophy I try to instill into our organization is to be the very best at providing the utmost in service and support to our distributors. Thus, characteristics like dedication, commitment and integrity become fundamental principles of the company.

JF: How do you communicate with your team?

David Lisonbee: We meet regularly as a management team. Our discussions are open and honest and of course lots of emails, text messages and cell phone calls.

Bianca Lisonbee: Lots of good open discussions on a regular basis, both one-on-one and in meetings. Oh yes: plenty of emails, too!

JF: Leaders usually draw on something or someone for inspiration, guidance and direction. Do you have a hero or heroine?

David Lisonbee: My parents have set a wonderful example for me. My father taught me the value of work and my mother, as a writer and practitioner in natural health, instilled in me the desire to pursue research in this area.

Bianca Lisonbee: My parents and grandparents set a great example for me. My grandparents immigrated to America from Italy. They had heard that in America the streets were paved with gold. Well, when they got to New Orleans they found out that not only were the streets not paved in gold, but that in many places they didn’t even have streets, but only Mississippi mud! But they rolled up their sleeves and got to work. My grandfather started The Central Grocery in the French Quarter which has become a New Orleans landmark. The sandwich he invented, The Muffaletta was recently voted on the Today Show as one of the five best sandwiches in America. They taught me that one of the greatest things you can give someone is an opportunity – a chance. They didn’t expect a handout, but they were so grateful for an opportunity to better their lives and the lives of others. And isn’t that what this industry is all about?

I also learned from my parents that you need to pursue your dreams even in the face of adversity. My mother gave birth to me on board a ship in the middle of two hurricane strength storms while she and my father were coming to America from Italy. She named me “Bianca” after part of the ship’s name, the Conte Biancamano. My father, who was an obstetrician and could have been of great help to her, was so deathly seasick he was of no use at all! A young steward had to read a first aid manual on how to deliver a baby. My Mother said that even though she had visions of having to get into a lifeboat with her new baby, she felt in her heart that all would be well and that they were meant to come to America. Although my parents and grandparents have passed on, their courage and work-ethic continue to inspire me.

Steve Tew: Abraham Lincoln, but probably not for the same reasons that would normally be thought of. He was able to take people with completely opposing points of view, utilize their various talents and take the best from each of them to accomplish his objectives.

JF: Which other direct selling company or person do you admire the most and why?

David Lisonbee: Companies like Avon, Mary Kay, NuSkin and others have brought a dignity to the industry that I very much appreciate.

Bianca Lisonbee: I appreciate the fact that Nature’s Sunshine was such a pioneer in being the first company to encapsulate herbs.  We all owe them a lot. I also admire the great things that NuSkin is doing with their humanitarian efforts in feeding children.

JF: What do you see as our industry’s greatest challenge?

David Lisonbee: To properly communicate the beauty and advantages of this wonderfully efficient and productive channel we call Direct Selling.

Bianca Lisonbee: Probably negative stereotypes. Because there have been some bad players in this industry I think some people continue to have a perception that this is all about get- rich -quick schemes, and that is unfortunate. At its worst I guess this business model can be abused that way, but at its best, I know of no better business model where so many people can benefit from bringing a product to the marketplace than in network marketing. I have seen the lives of people, many who live in third world countries, dramatically changed for the better through our industry. These are people who would have had no other opportunity for this kind of success. I think that people are beginning to see this business model as a wonderful form of mirco-franchising in which someone can start their own business with very little initial risk or investment. All they really need is a great company and a desire to share their story with people.

Steve Tew: One of the biggest challenges we face on a worldwide basis is the regulatory environment we are currently facing. We face significant challenges that could pose a serious threat to our industry relating to product regulations, product claims, product registrations, direct selling regulations, etc.

JF: What is your favorite way to relax?

David Lisonbee: I enjoy a good round of golf.

Bianca Lisonbee: I like to cook up something to eat, probably something Italian, put on some music, and sit around a table laughing and talking and eating with family and friends. I also love to curl up with a good book.

Steve Tew: The best way for me to relax is to get out on the golf course for a few hours.

JF: When are you happiest?

David Lisonbee: When I am with my wife and children and grandchildren, and when I see my children making good life choices.

Bianca Lisonbee: When my thoughts and actions are most aligned with my personal values and convictions.

Steve Tew: The thing that brings me the greatest happiness is seeing my children achieve their goals and reach their personal dreams.

JF: What is your favorite travel destination and why?

David Lisonbee: Italy. That is where my wife is from. I love the country as well as its history.

Bianca Lisonbee: Home! Because as Dorothy in the Wizard of Oz stated, “There’s no place like it!”

Steve Tew: My favorite destination is Europe, specifically Germany. I have had the opportunity to live in Germany six years of my life and I truly enjoy returning there.

Filed Under: Daily News

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