VOLUME 16 / ISSUE 9
SEPTEMBER 2020
THE RE-EMERGENCE OF
CUSTOMER-CENTRIC S TA N D I N G U P T O C U S T O M E R E X P E C TAT I O N S , R E G U L AT O R Y S C R U T I N Y A N D S U S TA I N A B I L I T Y G O A L S
F E AT URE / 5 LESSONS LEARNED (& COUNTING) FROM THE COVID-19 LOCKDOWN F E AT URE / THIRTY-ONE GIFTS & KANBRICK INVESTMENTS—WHAT IS THE STORY HERE? IT WORKS! / DREAMS FOR A NEW SEASON LIMELIFE BY ALCONE / DEFINING EMPOWERMENT
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C O N T E N T S S E P T E M B E R
2 0 2 0
FE AT URES
Five Lessons Learned (& Counting) from the Covid-19 Lockdown B Y SAR AH PAU LK Thirty-One Gifts & Kanbrick Investments— What is the Story Here?
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54 It Works!
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6 D I R E C T S E L L I N G N E W S |
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42
J EN N Y VE T TER
IN EVERY ISSUE 10-11 AD INDEX // 13 FROM THE EDITOR // 15 INDUSTRY NEWS // 36 FORWARD THINKING // 85 DSA MESSAGE // 86 VENDOR DIRECTORY //
SEPTEMBER 2020
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Serving the Direct Selling and Network Marketing Executive Since 2004 A SUCCESS Partners Company
FOUNDER AND CEO
Stuart P. Johnson CONTRIBUTING EDITOR
John Fleming MANAGING EDITOR
Patricia White editor@directsellingnews.com C R E AT I V E D IR E C T O R
Julio Garcia SENIOR ART DIREC TOR
COVER STORY
62
THE RE-EMERGENCE OF CUS T OMER-CENTRIC
Standing up to Customer Expectations, Regulatory Scrutiny and Sustainability Goals
Susan Douglass ART DIREC TORS
Laura Castillo Jenny Paredes PRODUCTION MANAGER
Virginia Le COPY EDITOR
Peter Tepp BUSINESS DE VELOPMENT MANAGER
Melinda Bogoslavsky advertising@directsellingnews.com CONTRIBUTORS
J.M. Emmert John Fleming David Lee
Sarah Paulk Beth Douglass Silcox Jenny Vetter
BY BETH DOUGLASS SILCOX
Direct Selling News (ISSN 15546470) is published monthly by SUCCESS Partners, 5800 Democracy Drive, Suite 100, Plano, TX 75024. Periodicals postage paid at Lake Dallas, TX and additional mailing offices. POSTMASTERS please send change of address to 5800 Democracy Drive, Suite 100, Plano, TX 75024. Subscription Rate: Free to direct selling and network marketing executives; all others in USA and Canada $50. Overseas subscriptions are $100. All subscriptions must be paid in U.S. dollars. ©2020 Direct Selling News All rights reserved. Material may not be reproduced in whole or in part in any form without written permission. No statement in this publication is to be construed as a recommendation to buy or sell securities or to provide investment advice. Direct Selling News 5800 Democracy Drive, Suite 100, Plano, Texas 75024 / Phone: 800-279-5249 www.directsellingnews.com
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& Thank you to all our 2020 Supplier Sponsors
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FROM THE PUBLISHER Patricia White Takes Reins from Todd Eliason
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ELLO! IT is nice to have this opportunity to speak to all of you again from the publisher’s chair. I was invited to be a guest contributor for this month’s issue to share an announcement on the leadership of the magazine as well as some thoughts on DSN’s mission as a trusted news source. Todd Eliason, publisher and editor in chief of this publication since April 2018, has decided to move in another direction along his career path. I have known and observed Todd for many years, much of it during his association with DSN’s parent company before it assumed the current SUCCESS Partners name. Todd has always been a person who brought more than his skills to his work. He brought tremendous passion and commitment, and this is why I was personally enthused when I heard he would be succeeding Lauren Lawley-Head (who succeeded me in the role). Todd, we salute you for a job well done and thank you for the many contributions you made during your tenure at DSN. Patricia White now takes the baton from Todd and is the new torchbearer for Direct Selling News. You likely have seen Tricia’s name in the masthead of the magazine as she has served as DSN’s managing editor for the past two years. She has a background in education and banking and is well-suited for her new role in leading the magazine, having excellent project management skills and extensive experience in producing publications. We know she will continue to bring new ideas and innovative thinking to the table in support of the brand you look to for information and inspiration. Stuart Johnson, founder of Direct Selling News, had a vision for a publication that would serve the executives of the direct selling business model. Stuart made it possible for the vision to become a reality and since 2004, the Direct Selling News platform has been telling the stories that need to be told. Committed to a philosophy of positive journalism, DSN strives to keep readers apprised of important happenings in the channel as well as trends affecting all businesses. It does this daily through news posted on the website and monthly through the informative articles in the print version. We celebrate the many suppliers who make DSN possible. As I review each month’s issue, I often think about how this publication got started—particularly the brands that trusted the mission of DSN enough to advertise in the magazine. I know Tricia will look forward to getting to know each of you. As always, we also celebrate you, the reader, the audience this publication serves each month, each week, each day. We celebrate you because it is you who are leading your companies through some of the most challenging times ever, making possible a wonderful channel of distribution that enables people from all walks of life the opportunity to engage and benefit from the rewards and recognition you make possible. The hundreds of thousands of independent contractors who have chosen direct selling to meet certain needs, or short- or long-term goals, inspire all of us to do what we do. We are all blessings to each other. We are grateful. Watch for Tricia on this page next month. Enjoy the issue….
JOHN T. FLEMING | FORMER PUBLISHER AND EDITOR IN CHIEF | DIRECT SELLING ADVOCATE FOLLOW US ONLINE:
@directsellingnews
@DSNUpdate
Join our LinkedIn Group w w w . d i r e c t s e l l i n g n e w s . c o m 1 3
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IN THIS ISSUE
16
T HE MON T H IN NE W S A F F E C T IN G O UR C H A NNE L
Leading Off M A IN S T OR Y
Regal Ware Celebrates 75th Anniversary
A RII X , NE WAGE CRE ATE UNIFIED PA R TNERSHIP
A 18
Britt Cool Takes Ownership Stake in Thirty-One Gifts
22
DSA Canada Research Reveals Consumers Seeking Additional Earning Opportunities
30
Direct Selling Companies’ Impressive Performance Continues
July agreement between ARIIX and NewAge, Inc., a publicly traded NASDAQ listed company, has the potential to create the only omni-channel company in direct selling with access to e-commerce and direct-to-consumer channels in more than 75 countries. “We are very excited that these companies are coming together to create a powerful global enterprise with tremendous growth potential,” said NewAge CEO Brent Willis, who will be the CEO of the newly combined company. “We
believe this partnership will be an industry game-changer, as we will have the team, the scale, the profitability, the brands and the reach to drive superior growth and return for shareholders and all of our valued independent Representatives and consultants worldwide.” THE AGREEMENT NewAge, who also acquired Morinda in late 2018 and now operates a direct-selling division Noni by NewAge, signed a definitive agreement on July 20 to merge with ARIIX—which was founded nine years ago by Dr. Fred
Cooper and Mark Wilson— along with four additional companies (LIMU, MaVie, Zennoa and Shannen) that ARIIX acquired. Consideration for the acquisition will consist of a combination of cash, common stock and convertible notes. At closing, NewAge will pay $25 million in cash and will issue 18 million shares of the company’s common stock. NewAge will also issue a …
To read the full news feature, scan the QR Code, or visit http://bit.ly/DSNQR
“
T H E Y S A ID I T !
We know that it’s not just our passion for our customers that has boosted us to the top; it’s our emphasis on delivering superior quality in everything we do, our pledge to maintain integrity in all business practices, and our dedication to innovation and continuous improvement. — J E F F R E I G L E , R e g a l W a r e P r e s i d e n t a n d C E O w w w . d i r e c t s e l l i n g n e w s . c o m 15
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I N D U S T R Y N E W S For full article visit
directsellingnews.com /category/news/
News in Brief
Regal Ware Celebrates 75th Anniversary
R
egal Ware celebrated its 75th anniversary. Founder J.O. Reigle started the company in 1945 out of a desire to build “the finest plant with the finest equipment to produce and sell the world’s finest cooking ware.” As a business owner, salesman, philanthropist and family man, Reigle embodied the self-reliance, core values, innovation and resolve that have become the cornerstone of the company. With both third and fourth generations of the Reigle family—as well as other multi-generational families— working for Regal Ware, he created a legacy of excellence that continues to live on today. “We have achieved this 75-year milestone through the collaboration, ingenuity and dedication of our employees,” said Regal Ware President & CEO, Jeff Reigle. “We know that it’s not just our passion for our customers that has boosted us to the top; it’s our emphasis on delivering superior quality in everything we do, our pledge to maintain integrity in all business practices, and our dedication to innovation and continuous improvement. It is our exceptionally skilled and talented staff, our commitment to workplace diversity, and our long history of treating everyone with dignity and respect. And it is our connection to our local community, where our employees donate countless hours of service and where we direct much of our financial support. We heartily recognize that the success of our company comes directly from the success of our customers, our business partners and our employees.” Regal Ware conducts business in more than 45 countries. It is a long-standing member of the Direct Selling Association, the Cookware Manufacturers’ Association and the International Housewares Association.
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Mary Kay Inc. Expands Partnership with The Nature Conservancy
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ary Kay recently announced it has expanded their partnership with The Nature Conservancy to impact waterways—and native species—the world over. “All life on Earth began in and depends on our oceans,” said Deborah Gibbins, chief operating officer at Mary Kay. “Water is the most valuable resource on our planet, and it’s essential that we do our part to protect it. When we began scaling our partnership with The Nature Conservancy last year, we focused on the waterways surrounding our home state of Texas. But we’re a global company, and we knew the need for support stretched far beyond the Gulf of Mexico. We’re thrilled to advance ecosystems and biodiversity conservation globally.” Founded in 1951, The Nature Conservancy is the leading conservation organization, working around the world to protect ecologically important lands and waters for nature and people. The Conservancy’s practices are rooted in science and are driven by pragmatic solutions to the most pressing conservation threats at the largest scale. “We need healthy, diverse oceans for fishing, working and playing,” said Lily Verdone, director of Freshwater and Marine at The Nature Conservancy. “But protecting oceans is about more than just protecting our planet: oceans add $1.5 trillion to the global economy each year. Mary Kay has long worked to impact change that will sustain the earth for generations to come, so they are a natural—and welcome—partner for The Nature Conservancy. We’d already seen such impactful change in Texas, and we’re thrilled to see what their contributions will help us accomplish in communities across the world.” Mary Kay also sponsored EarthxOcean conference, a live streaming event that brought experts, researchers and conservationists together in a livestream to discuss topics such as the High Seas Initiative, coral reef restoration, ocean plastic solutions and sustainable fisheries.
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New Avon Partners with Gyrl Wonder
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Amway Partners with Microbiome Startup HEM
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mway has announced a strategic investment and partnership with South Korea-based Holzapfel Effective Microbes (HEM). Together, the companies will develop personalized probiotics with the goal of supporting wellness through gut-health-related benefits such as immunity, weight management, brain health, skin health and more. “Amway is uniquely positioned to deliver personalized recommendations through the more than one million Amway Business Owners (ABOs) around the globe who live to serve their customers and who have already built vibrant wellness communities both online and offline,” said Amway CEO Milind Pant. “We have been helping people live better, healthier lives for more than 60 years, and have closely watched the evolution of, and growing trust in, personalized wellness and health. The science and innovation behind HEM’s at-home microbiome test matches our goal of accelerating the delivery of innovative wellness products to the world.” “For HEM, the partnership is an opportunity to reach customers through Amway’s trusted network of ABOs and fulfill our shared mission of helping people live healthier lives,” said HEM Co-founder and CEO Dr. Yosep Ji. “We are thrilled that the benefits of our science will find its way to Korean consumers and believe this partnership will fulfill our goal of helping people realize the holistic advantages of having a healthy gut microbiome.” For Amway, this is the first strategic partnership focused on providing personalized wellness solutions. The company is actively pursuing collaboration with startups in this space with an initial focus on scouting partners in South Korea, U.S. and China.
ew Avon has partnered with Gyrl Wonder, a professional pipeline initiative giving rise to ambitious young women of color between the ages of 17–22. Similar to Avon promoting female entrepreneurship and inspiring businesses for thousands of Representatives, Gyrl Wonder equips the young woman who has found her passion with the toolkit necessary to turn her interests into a career. Gyrl Wonder’s mission is to empower young women of color through social impact, career exploration and objective alignment. They provide access and resources necessary for them to successfully enter a competitive workforce while teaching them how to leverage these tools to reach their personal and professional goals. New Avon has donated over $100,000 worth of cosmetics, skincare, haircare, personal care and other essential products to the “gyrls” of Gyrl Wonder to support its mission pillars of selfcare, self-image, empowerment, development and service. Avon also plans to work with Gyrl Wonder for future workshops and internship opportunities. “Avon has championed amazing women for over a century, and we are proud to support Gyrl Wonder and the young women of color they champion,” said Avon CEO Paul Yi. “The synergy between Avon and Gyrl Wonder makes our partnership an excellent collaboration. At Avon, our goal is to celebrate women’s power to make a beautiful and positive impact in the world. We love celebrating the talented and passionate ‘gyrls’ of Gyrl Wonder.”
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I N D U S T R Y N E W S For full article visit
directsellingnews.com /category/news/
Buffett’s Ex-Deputy Britt Cool Takes Ownership Stake in Thirty-One Gifts
T
racy Britt Cool, a former key deputy to Warren Buffett at Berkshire Hathaway Inc., is taking an ownership stake in Thirty-One Gifts. Kanbrick, the investment firm led by Britt Cool and cofounder Brian Humphrey, will become a partner and owner with Thirty-One Gifts founder Cindy Monroe. Monroe maintains a role at the company, while yielding the chief executive officer job to Elizabeth Thibaudeau, who was CEO of Jamberry and is a former executive at Nu Skin Enterprises Inc Britt Cool, who worked for years under Berkshire, announced last year that she would leave to form her own business. Kanbrick, based in Chicago, aims to buy and build businesses to hold for the long term. Thirty-One Gifts, which
Monroe started in 2003, sells bags, luggage, accessories and other items through a network of salespeople who host parties to pitch the products. “We created Kanbrick to provide business owners and founders a long-term home for their businesses,” Britt Cool said in an emailed statement. “Thirty-One has a great history, a strong brand and a differentiated sales model, and we look forward to supporting the sales field to grow their businesses and to provide more opportunities to expand their selling opportunities digitally.” * See the DSN Feature Article on page 80 for more information on this.
Medifast Revenue Up 17 percent in Second Quarter
M
edifast, the company behind OPTAVIA®, reported revenue of $220.0 million for the second quarter ended June 30, 2020. Second quarter revenue increased 17.6 percent to $220.0 million from revenue of $187.1 million for the second quarter of 2019. OPTAVIA-branded products represented 83 percent of consumable units sold for the second quarter compared to 75 percent for the same period a year ago. The total number of active earning OPTAVIA Coaches increased 19.3 percent to 36,500, compared to 30,600 for the second quarter of 2019. The average revenue per active earning OPTAVIA Coach was $5,851 compared to $5,863 for the second quarter last year. While productivity was flat to the same period last year, productivity increased 9.7 percent sequentially compared to first quarter 2020. “This has been a strong quarter for Medifast, with strong demand and engagement among OPTAVIA Coaches and Clients helping to deliver meaningful revenue growth,” said Dan Chard, chief executive officer of Medifast. “We have more active earning Coaches than at any point in our history, and 1 8 D I R E C T S E L L I N G N E W S |
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Coach productivity is up substantially quarter-over-quarter near all-time highs. At a time when health and wellness is more important than ever to people in the United States and around the world, our service and products are clearly resonating with consumers who want to achieve lifelong transformation one healthy habit at a time.”
SEPTEMBER 2020
8/18/20 9:43 PM
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I N D U S T R Y N E W S For full article visit
directsellingnews.com /category/news/
Longaberger Reimagines Social Selling for Millennial Generation
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Isagenix’s Kathy Coover Shares Blueprint for Success in New Book
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sagenix International Co-founder and Executive Vice President Kathy Coover has released a new book, Resilient: Lessons Learned, Lives Changed. According to Coover, the book was written to inspire independent distributors to create and achieve their direct selling goals. She shares her blueprint for success and details how she became a highly respected leader and entrepreneur. “Thirty years ago, I began to research and refine a set of business-building strategies and personal growth techniques that helped me excel in direct sales,” Coover said. “What I learned empowered me to co-found one of the world’s most trusted and respected well-being companies—one that’s dedicated to helping people experience healthy, joyful, and abundant lives. I’m thrilled to share my findings so independent distributors can create the lives they truly want.” Key takeaways from the book include: • How to create bold and daring goals that help them elevate everything they do. • The daily benchmarks of success and how to achieve them. • How to distinguish between good ideas and great opportunities. • How to ask as if they expect to get a “yes.” • The secrets to success of 20 top Isagenix independent distributors. Because Coover is passionate about giving back, she’s donating proceeds from the book to the ISA Foundation, a 501(c)(3) nonprofit organization operated by Isagenix. The foundation focuses on healthy nutrition and support for underserved children, wellness education for all, aid for those affected by natural disasters, and the pursuit of racial equality. 2 0 D I R E C T S E L L I N G N E W S |
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ongaberger announced the next chapter for the company with the launch of a new digital social selling business model. The American home collectibles brand known for artisanal handcrafted products will be offering timeless and new modern décor products. The Longaberger Company was founded by Dave Longaberger in 1973 and for generations, the family has manufactured handmade maple baskets and various home products that have been collected by a loyal community of customers. In 2019, Xcel Brands (Nasdaq: XELB) acquired The Longaberger Company. With a digital-first approach, Xcel Brands has transformed Longaberger’s traditional multi-level platform into a state-of-the-art peer-to-peer social commerce community with expanded home and lifestyle categories. Each Home & Life Stylist is now provided with a personalized digital storefront, which is enabled with advanced SMART web technology in the form of a personalized marketplace customized with a secure and quick connection to their social media networks. “Transforming the heritage of the Longaberger brand into a digital-first company for our engaged community was our top priority,” said Robert W. D’Loren, Xcel’s chairman and chief executive officer. “We aim to build upon the rich history coupled with our new digital social selling business model to become the world’s largest, and most engaged, social commerce community.” Longaberger supports and empowers artisans across the United States and around the world by curating a selection of products that are hand-made, hand-crafted and hand-selected. Current categories offered include baskets, cookware, tabletop, drinkware, serve ware, storage, décor, ceramics, linens, furniture and gourmet foods. Longaberger will be entering new categories, including new launches and artisan partnerships in pottery, wine, jewelry, apparel, home fragrance, essential oils, skin wellness and more.
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I N D U S T R Y N E W S For full article visit
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DSA Canada Research — Consumers Seeking Additional Earnings
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esults from consumer research conducted by the Direct Sellers Association (DSA) of Canada show the potential for growth in the “side-hustle” world. A key finding was that almost 4 in 10 Canadians will look to make additional money outside of their direct employment. The research showed that 37 percent of Canadians are seeking extra earning opportunities and that among those aged 18–29, this number jumps to 56 percent. The age-group showing the lowest interest in earning additional income, at 20 percent, were those aged 60 and over. According to Peter Maddox, president of the DSA Canada, the research reflects the realities caused by the COVID-19 pandemic, as well as general economic uncertainty experienced by many across the country. In particular, from April to June, 32 percent of Canadians reported experiencing a decline in or a total loss of their income.
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“The study results are also borne out by a recent rise in sales and enrolments for direct selling businesses,” said Maddox. “For example, DSA Canada member company MONAT saw a 200 percent increase in new independent sales consultant enrolments in the first three months of the pandemic.” When questioned about direct selling, 22 percent of survey respondents considered it a realistic opportunity for earning additional income. This rose to around a third for respondents under the age of 44. Somewhat unexpectedly, men were slightly more likely to be open to a direct sales opportunity at 24 percent, 3 percent more than for women. The survey also delved into respondents’ overall impression of the direct selling industry. It was found that 33 percent of the population had a positive impression, 35 percent negative, while 32 percent didn’t know enough to have an impression one way or another. DSN
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I N D U S T R Y N E W S For full article visit
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Insights
News Impacting Our Channel
6 Ways You Aren’t Putting Your Customer First—and How to Fix Them (Excerpt from forbes.com by Serenity Gibbons)
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very dollar your business spends on promoting the well-being of your customers is a dollar that will come right back to you. Eighty-six percent of buyers are willing to pay more for a better customer experience, so failing to put your customers first is equivalent to leaving money on the table. In times like these, it can be easy to lose sight of everything but the bottom line. But ignoring the needs of your customers will do you more harm than good in the long run. Businesses hoping to ensure their success well into the future need to treat their customers right today. Here’s how you can do so:
1. UNRESEARCHED MARKETING Your customers may know your brand, but does your brand know its customers? People want to see advertising that directly appeals to their concerns as customers, and your business needs to be able to provide that. Knowing your customers is the first step to providing them with what they want. There are several different ways you can develop an understanding of your consumer base, but 2 4 D I R E C T S E L L I N G N E W S |
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HubSpot’s guide to market research is a good place to start for the uninitiated. Learn about their demographics, interests, and desires as consumers—all of this information can help you know how best to put them first. 2. INACCESSIBILIT Y If your customers have something they need to say to you, they shouldn’t have a difficult time doing so. Many businesses, however, simply have a “contact us” form, with little more than an email that rarely gets answered. Your clientele deserves better, and new tools are being developed all the time to help you do that. Simply put, you need to get your customers in touch with a human being as frequently as possible. Unfortunately, most businesses don’t have the digital infrastructure in place to make that feasible—enter applications like PingPilot. PingPilot can integrate SMS, live chat, and email directly onto your business’s website, landing page, or e-book, giving your customers a click-to-human experience. With storefronts closed and call centers shuttered, you need a digital bridge between you and your patrons.
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3. NOT LISTENING Once you’ve established a channel for your customers to reach out, you need to be sure to listen to what they have to say. For plenty of companies, customer feedback goes in one ear and out the other— an attitude almost guaranteed to lose business. While the obvious solution is to always listen to your customers, you should also be asking the right questions. If you’re only inquiring about the information you need to know, you’re far less likely to lose track of the answer. The customer survey guide from Hotjar is a helpful template for learning how you can communicate with your clients in a way that produces valuable information. 4. LOSING SIGHT OF YOUR MISSION In 2020, people are drawn to companies that stand for something. The organizations that have goals and values are the ones geared for success in today’s market, so developing and maintaining a companywide mission is more important than ever before. As economic certainty decreases, it’s tempting to ignore goals that aren’t directly related to filling your company’s coffers. But losing sight of your mission may cost you more than you know. An unguided company can hemorrhage customers like no other, so getting everyone on board with your mission now promotes your business’s well-being later on.
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5. SILOING TEAMS If your entire company isn’t working together, people can’t possibly be focused on the same goal of promoting the customer. You need to start integrating your business’s various work teams to ensure that all of your employees are on the same page in that respect. One of the best ways to do so is by adopting the right collaboration software. Work management solution WorkFront reports that 94 percent of companies find that collaboration is critical to their overall success and using project management software is a good way to kick that off. Especially as levels of remote work hit new highs, businesses need to find ways to let technology help them cultivate teamwork. 6. L ACKING TR ANSPARENCY The 2019 Edelman Trust Survey uncovered a number of interesting facts, perhaps the most consequential of which is that more than USAGE OF TAGLINED 80 percent must trust a brand before purchasing its products. You LOGOS need your customers to trust you, and transparency is the only wayOne-tagline version of full color logo The tagline "AUDIT.TAX.ADVISORY" to guarantee that. only accompanies the logo in circumstances where requires Regularly release statementsclarification regarding thecontext current state of your about what Squire can do for current and potential customers business and what’s coming next. Respond to every moment of crisis (the audience). or uncertainty with candor and openness—being honest with your For example, Squire.com and its feature the onecustomer base is the only way tosubsequent developweba pages lasting sense of trust. Secondary-tagline tagline version (HIGHER version of full color It’s simple: Value your customer, and they will value PERSPECTIVE ONLY) of the Squireyou in return. logo logo because the subpage content Business is all about relationships and developing throughout the site providespositive adequate ones context to visitors. with your clients is a crucial component of success that’s far too On the other hand, if the team attends often ignored. DSN a national financial trade show where Squire should differentiate itself from a neighboring financial software company, then trade show banners need to include the tagline, “Audit-TaxAdvisory.”
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Treat the secondary tagline like it’s part of the logo but secondary in focus to the logo itself.
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W h e n a p p r o v e d b y t h e c o m p a n y , any word usage, may be used with the
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Secondary-tagline
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Executive Announcements TRUMAN HUNT, Solvasa Chairman of the Board Truman Hunt has joined the founding board of directors of new integrative beauty company Solvasa as chairman. Solvasa was founded by health and beauty industry veteran Lori Bush and leading Beverly Hills plastic surgeon Dr. Ritu Chopra. “I cut my teeth in the direct selling channel under Truman’s Leadership,” said Lori Bush, Solvasa CEO. “He is the best of the best when it comes to business insight, strategy and integrity. What I love most about Truman is his passion and commitment to the independent micro-entrepreneurs who make this business model so very special. I’m over the moon to be working with him again.” “The environment for direct selling is evolving significantly, and the companies that will succeed and sustain are those that embrace the digitally and generationally driven changes while
protecting the core values that make this business model more relevant than ever,” said Hunt. “After doing a deep dive into Solvasa’s products, programs and roadmap, I was impressed enough to not only accept a board position, but to make a major investment in the company. Those who know Lori Bush also know that she is one-of-a-kind. Her passion for innovation is remarkable and her track record inside and outside the direct selling channel is unique. To join forces with her and her team at a pivotal time for direct selling is an opportunity I could not overlook.” In his role as chairman, Hunt will provide oversight of the company’s vision of building a sustainable, digitally empowered community of independent social marketers with uniquely relevant, highest-quality products and programs that support social selling leadership.
PATTY HOPPENSTEDT, Southwestern Vice President of Human Resources Prior to joining Southwestern, Patty Hoppenstedt has joined Hoppenstedt held HR leadership roles Southwestern Family of Companies as at a variety of companies and city vice president of Human Resources. governments including DentaQuest, In her new role, Hoppenstedt will be Amedisys, Village of Schaumburg, responsible for providing consultation and Levy Security Corporation. She on strategic staffing plans, including attended the University of Illinois at compensation, benefits, training and Chicago and holds an MBA specializing development, budget and labor relations. in Human Resources Management “Patty has spent more than 20 years from the Keller Graduate School of in HR within a variety of industries,” Management of DeVry University. said Dustin Hillis, CEO of Southwestern Family of Companies. “That will be a huge advantage as she assists our diverse family of companies with their HR needs.” 2 6 D I R E C T S E L L I N G N E W S |
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PRASAD GANKANDA, Young Living Executive Vice President of Global Sales Young Living promoted Prasad Gankanda to executive vice president of Global Sales. “As we lead our company through unprecedented times, Prasad has been instrumental in directing our sales team across the globe through the business challenges that come from a pandemic,” said Jared Turner, president and COO of Young Living. “He is an essential addition to our executive leadership team. He brings tremendous value to Young Living through his entrepreneurial spirit, using his creativity to help push everyone beyond their limits.” Prasad has over 10 years of experience in directing global business operations. Since joining Young Living in 2015, he has successfully expanded into new markets such as South Korea, South Africa, Brazil, Colombia, Costa Rica and Macau. “I have always been impressed by the innovative spirit at Young Living and I have big visions for the future,” said Gankanda. “In order to scale our high standards as we continue to build, I look forward to working closely with my teams to do their best work. I am passionate about advocating for our markets and members to make sure they have a voice within the company and that they have the tools they need to be successful. Our members are our number one asset.”
HEIDI WISSMILLER, Nature’s Sunshine Board of Directors Nature’s Sunshine Products, Inc. has appointed Heidi Wissmiller to its Board of Directors. Wissmiller will also serve on the company’s Audit and Risk Management Committees. “Heidi is a proven executive with a long track record of implementing effective growth strategies for notable consumer product brands,” said Terrence Moorehead, president and CEO of Nature’s Sunshine. “We believe Heidi’s wealth of knowledge in consumer products and digital implementation will be invaluable in assisting our efforts as we continue the transformation of our business. We look forward to her strategic guidance as a member of our board.” Commenting on her appointment, Wissmiller stated: “Nature’s Sunshine has built a unique platform dedicated to providing consumers the highest-quality nutritional supplements and personal care products. Having successfully created and led growth strategies for multinational companies throughout my career, I plan on leveraging my expertise to collaborate with the board and management team as we continue implementing the company’s five global growth strategies.”
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JIM MALONEY, Medifast Chief Financial Officer Medifast, Inc appointed James (Jim) Maloney as chief financial officer. In his role, Maloney will be responsible for leading the finance function, including all aspects of financial planning and analysis, setting Medifast’s financial and capital allocation strategies and managing investor relations. “We are pleased to welcome Jim to the Medifast team as we continue on our mission to offer the world lifelong transformation, one healthy habit at a time,” said CEO Dan Chard. “Jim brings deep public company experience, a strong focus on capital allocation and an ability to manage the finance function of a fast-growing, dynamic and complex business. He also has a history of building value, which will be important as we aim to deliver long-term sustainable growth through our differentiated approach to health and wellness.” “I am thrilled to join the team at Medifast, said Maloney. “The company’s unique business model, collaborative culture and OPTAVIA’s robust and inspiring community provides the opportunity to drive significant value for stockholders.”
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CAROLYN DIELMANN CONNOLLY, Kannaway Brand Ambassador Medical Marijuana, Inc. announced that its subsidiary Kannaway welcomed Carolyn Dielmann Connolly to the company’s team of brand ambassadors. “Having seen all that Carolyn has accomplished in her previous roles, I am humbled and excited to have her join Kannaway,” said Kannaway CEO Blake Schroeder. “We look forward to working alongside her as she develops her global leadership team at Kannaway and helps us continue to reach new customers.” Connolly has spent her networking career with a few well-known companies and has built a reputation as a top money earner. She has built, trained and led successful teams across the health and wellness sector of the network marketing industry and developed leaders, systems and step-by-step programs to help others be successful. “I have studied the CBD industry closely over the past few years and wanted to get involved because of the immense potential it has both in its ability to help many consumers and as a financial opportunity,” said Connolly. “I am confident in my ability to build a strong and passion-driven team around Kannaway’s strong values and innovative offerings.”
MURRAY SMITH, doTERRA President of Europe, Eurasia and Middle East doTERRA announced the appointment of Murray Smith as president of Europe, Eurasia and the Middle East. According to the company, as one of the first employees of doTERRA Europe, Smith has helped lead the market through double-digit, yearover-year growth while helping to open several new countries each year. David Stirling, founding executive and CEO, emphasized the growth and Wellness Advocate leaders in the region as well as the market’s bright prospects: “The Board is confident in Murray’s abilities, experience and judgment in this enhanced assignment, and we look forward to his ongoing contributions to the region’s growth.” “Murray has been an integral part of doTERRA Europe since 2014,” said Kirk Jowers, executive vice president of Europe, Eurasia and the Middle East. “His promotion reflects the incredible job he is doing, and the significant responsibilities he carries. We are grateful that Murray and Heidi will be moving to Munich, Germany, so they can be more seamlessly integrated with our people and operations.” DSN
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Financial Analysis Direct Selling Stocks Continue to Outperform DJIA (This article was originally released on August 3, 2020. It has been updated to reflect Q2 2020 financial reports released after that date)
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NSIGHTS FROM Transformation Capital show that both large-cap and small-cap direct selling stocks continue to dramatically outperform the Dow Jones Industrial Average (DJIA). L ARGE-CAP STOCKS The four large-cap direct selling stocks continued to march higher during July, surging a collective 16.5 percent during the period, compared to a relatively paltry 2.4 percent gain in the DJIA for the period, and have now risen more than 67 percent since February 28, 2020, as compared to 5.7 percent increase for the DJIA. Both individually and as a group, these direct selling stocks continue to outperform the major indices since March 1, 2020.
Medifast, Inc. (NYSE: MED) continues to stand out as a leader among the group as it gained an additional 20.4 percent over the course of July and has now more than doubled since its February 28, 2020 close (106.8 percent). MED is expected to report its second quarter 2020 financial results after the market close on August 5. The Company declined to provide guidance for the quarter, and withdrew its full year guidance, due to uncertainty related to the COVID-19 pandemic. However, during its first quarter 2020 earnings conference call, management stated that April revenue had tracked slightly ahead of the same month of the preceding year. Analyst consensus estimates call for earnings of $1.84 per share, which would represent a year-over-year increase of 5.1 percent, on revenue of $194.75 million, or 4.1 percent above the second quarter of last year. Medifast is currently trading near its 52 -week high, which represents its highest levels since the fall of 2018, and the stock has doubled in the last four months alone. Based on these facts alone, it would not be surprising to see some profit taking at these levels, regardless of the strength of the Company’s performance. However, if the Company reports results and issues guidance significantly ahead of expectations, then it would not be surprising to see the stock continue its upward trajectory. 3 0 D I R E C T S E L L I N G N E W S |
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UPDATE: After the market closed on August 5, 2020, Medifast reported second quarter financial results including revenue of $220 million (+17.6 percent YoY) and earnings per share of $1.86 (+6.3 percent YoY). Both revenue and earnings per share results were ahead of consensus analyst expectations of $195.75 million and $1.84 per share. Prior to the release, MED traded to a new 52-week high of $183.54. On August 6, the day following the release, the stock traded off approximately 10 percent closing at $164.44. Since that time MED has been consolidating in that range, on average trade. As predicted above, it is believed this is not due to any disappointment in the stock’s performance, but, instead, profit taking as a result of its impressive run over the last several months, as well as a lack of forward-looking guidance, which was attributed to uncertainties related to the COVID-19 pandemic. Nu Skin Enterprises, Inc. (NYSE: NUS) also continued its strong, pandemic environment performance with a July gain of 17.3 percent, which allowed it to maintain its position as the second leading performer among the top-tier direct selling stocks since March 1, with a total gain of 87.1 percent over the last four months. Following the markets close on July 1, 2020, Nu Skin reported preliminary second quarter revenue results in range of $603 to $608 million, which was well ahead of its internal guidance range of between $520 and $550 million for the period. The following day the stock surged 25 percent on more than 4X average trading volume. Since that announcement, the stock has generally traded sideways in a consolidating pattern ahead of its complete second quarter earnings announcement, which is also scheduled after the market close on August 5. Analyst consensus estimates call for earnings of $0.63 per share on revenue of $606.02 million, which both represent year-over-year declines. Like Medifast, Nu Skin is also trading near its 52- week high. As a result, if the Company doesn’t come in ahead of those numbers and / or raise guidance for the remainder of the year, then it
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would not be surprising to see some profit taking here as well. However, based on Transformation Capital’s proprietary look at industry trends and data, as well as Nu Skin’s strong pre-announcement, it is expected that the Company will report results ahead of estimates and raise guidance for the remainder of the year. UPDATE: Nu Skin also reported second quarter financial results after the market closed on August 5. Revenue for the quarter was $612.4 million (-1.8 percent YoY) and earnings per share were $0.81 per share (-2.5 percent). Despite the slight year-over-year declines, Nu Skin’s results were ahead of updated consensus analyst expectations of $606 million and $0.67 per share. More importantly, and as predicted above, the Company raised its full-year guidance for both revenue and earnings per share. Since that time, the stock has remained stable and pegged near its 52-week high. The lack of dramatic response to the Company’s financial report is likely due to its pre-announcement discussed above. Herbalife Nutrition, Inc. (NYSE: HLF) turned in a strong July performance as well, rising 13.8 percent during the period and now 58.3 percent since March 1. Before the market opened on Monday, July 13, Herbalife announced a modified Dutch
auction tender offer to repurchase up to $750 million of the Company’s shares at a price of not more than $50, and not less than $44.75, per share. At the same time, the Company announced the largest volume points quarter in the Company’s history (following a record first quarter). Following these announcements, Herbalife’s stock moved aggressively higher, on more than 6X average trading volume, and closed the day 13 percent higher. Since that time, and much like Nu Skin and Medifast, Herbalife’s stock has been consolidating near the 52-week high it set on July 13, and much will depend on its earnings announcement scheduled for after the market close on August 6, as well as management’s outlook going forward. Herbalife declined to provide guidance when they announced first quarter results, however, record volume points serves as a strong indicator of the manner in which the Company’s business is performing. UPDATE: On August 6, 2020, after the market’s close, Herbalife reported the largest net sales quarter in the Company’s history with revenue of $1.35 billion (+8.6 percent YoY) and earnings per share of $0.95 (+36 percent YoY), both of which were ahead of analyst consensus estimates of $1.26 billion and $0.91 per share. Leading into the announcement, HLF traded nearly up to its 52-week high ($52.89) and reached $52.80 per
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share. On August 7, the stock traded down approximately 5 percent and has continued to trend down slightly since that time. Transformation Capital believes much of this is due to profit taking near 52-week highs, a “sell the news” mentality, and the fact that management did not provide forward-looking guidance. Wrapping up the large caps, USANA Health Sciences, Inc. (NYSE: USNA) rose 10.5 percent during the month, despite some significant profit taking following the Company’s second quarter earnings announcement on July 21, and now sits 22.8 percent above its February 28 closing price. USANA reported earnings of $1.32 per share, which beat analysts’ expectations by $0.13, and revenue of $259 million, slightly below expectations, but up year-over year. The Company also raised its full year guidance for both revenue and earnings per share. Leading up to its earnings release, USANA traded up to a 52-week high of 92.26 before declining due to mixed results and some profit taking through the end of the month. Transformation Capital remains bullish on the prospects of each of these four companies. While several possess complex operating and financial dynamics related to their global footprint, Transformation Capital believes the macro environment continues to provide tailwinds to each of their businesses, which leads to the belief that the short- to mid- term outlook for each remains strong. SM A LL-C A P S T OCK S For smaller capitalization stocks within the industry, all but one has continued to outperform the DJIA since the beginning of March and, collectively, the group is up 42.6 percent since that time. The group, in general, had a relatively flat July, with two notable exceptions. The big performance surprise was Tupperware Brands Corporation (NYSE: TUP). Historically, Tupperware might have topped the large-cap list and based on recent performance, might be rejoining it shortly. The company closed June at 4.75 per share and, one month later, closed July at $15.43, a huge one month gain of 225 percent (482 percent since March 1). On July 29, Tupperware announced financial results that included revenue and earnings per share ahead of analysts’ expectations and, apparently, brought some new believers to the company’s turnaround story. The largest hurdle currently facing the company is approximately $500 million in debt that must be refinanced, or renegotiated, by June 2021. Investors now seem bullish regarding the company’s prospects in addressing this key financial issue. Furthering investor confidence was the company’s ability to retire approximately $100 million of their outstanding bonds at less than par value and the new management team’s success 3 2 D I R E C T S E L L I N G N E W S |
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Well-run, customerfocused companies with consumable product offerings… are thriving today and there is no reason that should change in the near future. in cutting approximately $60 million in expenses on the way to a $180 million goal. Our internal definition of “large cap” within the direct selling industry is a minimum of a $1 billion market cap, which, based on its current $757 million valuation, puts Tupperware in play for inclusion on that list sometime in the near future. The second small cap with market moving news during the month was New Age Beverages Corporation (NASDAQ: NBEV), which, on July 20, announced an agreement to merge with ARIIX, along with four subsidiary companies, with consideration including $25 million in cash, 18 million shares of NBEV’s common stock, a six-month convertible note for $10 million and an additional $141.25 million convertible note that matures 24 months from closing. Based on Transformation Capital’s internal estimates this implies total consideration of more than $200 million. Further, based on research, this transaction makes ARIIX and/or its previous equity owners, easily the largest shareholders in the Company with a position north of 16 percent (next closest is 5.8 percent). As a result, we consider this to be a de facto reverse merger and, as a result, we would not be surprised to see a significant shift in the C-suite in the coming months. The day following the announcement the stock closed 41 percent higher on approximately 15X normal trading volume and has since settled into a consolidating pattern. The stock closed the month up 43 percent overall. New Age acquired Morinda Holdings, Inc. in December of 2018, which represented the Company’s initial entry into the direct selling space. NBEV’s stock has generally trended downward since that time, likely due to a history of significant
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operating losses. Management projects that the combined company will generate in excess of $500 million in revenue in 2020 and that the acquired businesses will provide a significant lift to the Company’s profitability. A NEW ADDITION Sharing Services Global Corporation (OTCQB: SHRG) is a new addition to this month’s report after the parent company of Elepreneurs and Elevacity rose 309 percent over the course of July and now stands 819 percent above its February 2020 close. In mid-March, the Company settled a long-standing piece of litigation with a former large holder and executive. Subsequently, on July 13, SHRG reported revenue of $131.4 million for its fiscal year ended April 30, 2020, which represented a year-over-year increase of 53 percent.
The stock surged higher the last two days of the month, on volume significantly higher than average, indicating a bullish sentiment from investors. SHRG’s market capitalization now stands at $50 million, placing it well above our internal minimum of $25 million for inclusion on this list. L OOK ING F OR WA RD All indications within Transformation Capital’s proprietary data set show another strong month for the industry in July among private companies, leading to the belief that most of the publics will follow suit. Well-run, customer-focused companies with consumable product offerings, particularly within nutrition, wellness, weight loss and personal care, are thriving today and there is no reason that should change in the near future. DSN
TRANSFORMATION CAPITAL, LLC is a boutique investment banking, business development and corporate finance advisory firm primarily focused on the direct selling vertical, as well as ancillary businesses. Located in Dallas, Texas, Transformation’s core service offerings include both buy and sell-side M&A advisory, equity and debt financing, as well as joint venture and partnership opportunities. For more information please visit our website at: www.transformationcapital.com
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Nominate Your Company as a Best Place to Work in 2021! NOMINATIONS ARE OPEN AUGUST 10 - OCTOBER 23! To nominate your company, please go to www.directsellingnews.com/bestplacestowork The Best Places to Work in Direct Selling will be featured in our April 2021 issue.
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DIRECT SELLING IS THE ORIGINAL PEOPLE BUSINESS. Measuring field engagement is critical to any company’s success, but the field is only part of the people equation. Once again, Direct Selling News has partnered with HR technology company Quantum Workplace to celebrate the important role direct selling companies play as employers in the marketplace and to identify the best of the best when it comes to creating engaging work environments.
ÂŽ
For sponsorship opportunities, please contact Melinda Bogoslavsky at 972.402.5133 or mbogoslavsky@directsellingnews.com
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F O R W A R D T H I N K I N G
The Retail Apocalypse Store closings on pace to exceed 20,000 in 2020.
W
E ARE WITNESSING a retail apocalypse,” states a Forbes.com article. Posted in early July, it notes 8,702 physical store closures and announced future closings in the U.S. within the first six months of 2020. The coronavirus pandemic certainly accelerated the sharp rise in closings, but thousands of stores have closed each of the past three years. In 2019, 9,302 stores closed, with 2018 seeing 5,700 closings, and around 8,000 closed in 2017. The article identifies the continued shift to online business as the biggest factor. “Today, many retailers achieve 35 percent or more of their sales through increasingly more sophisticated e-commerce—via their websites and other social platforms. It is remarkable how quickly shoppers have changed from buying in physical stores to online,” the article claims. The article listed companies that have already closed stores or announced closings that may continue past 2020. Some of the largest numbers include GNC (1,200 stores), JCPenney (154 stores), Pier 1 Imports (936 stores), Tuesday Morning (230 stores), AT&T (250 stores), Signet Jewelers (300 stores) and Stage Stores (738 stores). P RO JE C T ING W H AT ’ S T O C OME A June report from retail research firm Coresight Research showed U.S. retailers were on track to close between 20,000 and 25,000 stores this year, estimating 55 to 60 percent from malls. Department stores could end up being the hardest hit.
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It is remarkable how quickly shoppers have changed from buying in physical stores to online.
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T OD AY, M A N Y RE TA IL ERS A CHIE V E
35%
OR MORE OF THEIR SALES
through increasingly more sophis ticated e-commerce—via their websites and o ther social plat f orms
“Department stores have struggled for decades as the idea of a one-stop-shop at the mall fell out of favor with consumers, and though several companies had been making progress on turnaround efforts, the pandemic ‘doubled down on the pace of the decline,’” said Neil Saunders, managing director at GlobalData Retail. “Spending at brick-and-mortar stores is expected to bounce back,” says a Chicago Tribune article. “About 45 percent of people said their spending in stores will return to normal as soon as COVID-19-related restrictions lift, according to a June survey by 451 Research, part of S&P Global Market Intelligence. Nearly 40 percent expected their in-store spending to return to normal within three months.”
The article noted that discount chains such as TJ Maxx, Ross and Dollar General had done well with budget-conscious customers hunting for a bargain. Ross Stores opened 42 new locations in 2019. A 1,000-person survey conducted by Blue Yonder in the spring showed that 74 percent of consumers in April did more shopping online. However, the majority of respondents (69 percent) said they still prefer in-store shopping for groceries. A July post by Retail Info Systems listed retail customer behaviors most likely to remain after COVID-19. Accelerated self-service experiences and in-store pickup options increased the most in traditional retail stores such as Kohl’s, Best Buy and Dick’s Sporting Goods. The post also noted customers expect more online payment options such as Apple Pay, PayPal and Venmo for big and small purchases. Increasing investment in health is another major trend, mainly focused on immunity boosters and the consumption of health-improvement and sanitary products. While physical stores may be closing at a record rate, total dollars spent is still up compared to last year, according to The NPD Group’s Point-of-Sale Early Indicator Report. “U.S. general merchandise dollar sales increased 6 percent in the week ending July 11,” the report says. “Our industry experts note that while dollar sales were up, unit sales were down compared to the prior year. Higher-priced items and more types of retailers having reopened contributed to these results, where we see increases in dollar sales and dips in unit sales.” DSN w w w . d i r e c t s e l l i n g n e w s . c o m 3 7
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F O R W A R D T H I N K I N G
DIGITAL TOOLS
5 Ways for Creating Awesome Online Content
C
REATING TARGETED content to attract your specific audience is the core of effective online attraction marketing. These five digital tools are top choices for direct sellers and corporate teams to create and edit video, create various types of digital images and print materials, research keywords, and record and transcribe audio. V IDE O SHOP Video editing used to be left to professionals or complicated software. Today, most people can create high-resolution videos right from their phone and edit them like a pro. VideoShop is one of the most user-friendly and powerful video-editing apps available, allowing users to cut and resize videos; add background colors; merge videos; add images, text, music and sound effects; use slow motion; create borders; and add fun filters. Frame size presets are automatically optimized for various platforms such as YouTube, Instagram, TikTok and more than ten other display types. Videos can be shared to popular social platforms right from the app.
P E X EL S Pexels is a free online stock photo and video library growing in popularity with online content creators, bloggers and direct sellers promoting their businesses. You can search for photos by topic such as Nature, Food, Fashion, Adventure, Health, Art and many more. You can search by color or specific artists and photographers. Download options include different resolutions and the option to donate to the creator. Video lengths are typically 30 to 60 seconds, and without sound. The site also suggests photos and videos based on your searches and downloads. HOW TO GET IT , Pexels.com is free to use after creating an account.
HOW TO GET IT , VideoShop is available as a mobile app compatible with Apple or Android devices. Most features are included in the free version, but purchasing the Pro version unlocks additional editing and file type features.
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A NS W ER T HE P UBL IC Knowing what your target market is searching for online and the exact words they are using around your category is a “secret weapon” in creating targeted content. AnswerThePublic.com is a search tool that gives you content ideas around core keywords, helping you “discover an untapped goldmine of content ideas,” says the site. Search results are based on actual Google searches. For example, the keyword “keto diet” generates more than 150 related searches giving you more content ideas. “There are 3 billion Google searches every day, and 20 percent of those have never been seen before. They’re like a direct line to your customers’ thoughts,” the site says. C A N VA Canva has been a popular online image-editing tool for years, but it has evolved into a much more robust visual content creation tool. According to a Business News Australia post in late June, the Australia-based platform is now worth an estimated $6 billion (U.S.), with more than 30 million users worldwide and an estimated 80 designs completed per second. The platform brings a ton of professionally designed templates for just about any application you can think of including print materials such as business cards and flyers, or digital content such as Facebook posts or page covers, YouTube thumbnails, Instagram posts and stories, Pinterest pins, and even Zoom virtual backgrounds. Preset sizes are optimized for just about every social platform. Canva’s free version comes with a ton of templates, highquality images, clipart, backgrounds, fonts and layouts—all are regularly updated. The Pro version gives access to even more images, fonts and graphics and has added tools such as the ability to create a transparent background; automatic image resizing; create animated graphics, organize your own uploads into folders; and the ability to create your own branding kit of logos, color palettes and fonts. HOW TO GET IT , Canva is available for free at Canva.com or as an app for Apple and Android devices. Users can earn credits by referring others. It’s an online-based platform, so that projects can be saved and downloaded to your device.
HOW TO GET IT , AnswerThePublic.com is free to use with a limited number of searches per day. The Pro version has unlimited searches and users, allowing you to compare data over time, generate a CSV report and more. O T T ER Transcription technology is rapidly improving, and Otter is one of the leading audio-recording and transcribing apps available, known for its accuracy. Repurposing online content can save time, increase exposure, and give your target audience more ways to consume information. The ability to record and then transcribe audio quickly gives you two forms of the same content. As an example, you could record an interview, use the audio for a podcast or audio clip, then have the audio transcribed for a blog post. You can even clip portions of this content for social media posts. Otter is free for up to 600 recording minutes per month. It will timestamp sentences and pauses in the audio, and even automatically label different speakers if you choose to. You can then export the audio or text transcription. HOW TO GET IT , The website is Otter.ai, and the app is available via the App Store or Google Play Store. The Premium version allows you 6,000 transcription minutes per month, unlimited imports, and the ability to export to different formats such as a PDF or Word doc. DSN w w w . d i r e c t s e l l i n g n e w s . c o m 3 9
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F O R W A R D T H I N K I N G
MUST READS THE FUTURE IS FASTER THAN YOU THINK: HOW CONVERGING TECHNOLOGIES ARE TRANSFORMING BUSINESS, INDUSTRIES, AND OUR LIVES Author: Peter Diamandis & Steven Kotler (Simon & Schuster, 2020)
I
n their book Abundance, bestselling authors and futurists Peter Diamandis and Steven Kotler tackled grand global challenges, such as poverty, hunger, and energy. Then, in Bold, they chronicled the use of exponential technologies that allowed the emergence of powerful new entrepreneurs. Now the bestselling authors are back with The Future Is Faster Than You Think, a blueprint for how our world will change in response to the next ten years of rapid technological disruption.
WINNING NOW, WINNING LATER: HOW COMPANIES CAN WIN IN THE SHORT TERM WHILE INVESTING FOR THE LONG TERM Author: David M. Cote (Harper Collins Leadership, 2020)
B
usiness leaders often take actions that prop up earnings in the short -term but compromise their companies’ long-term health. David Cote, the muchrespected former leader of Honeywell International and one of the most successful CEOs of his generation, shares a simple, paradigm-shifting method of achieving both short- and long-term goals.
HAVE A LISTEN
HOW INNOVATION WORKS: AND WHY IT FLOURISHES IN FREEDOM By Matt Ridley (HarperAudio, 2020)
M
att Ridley chronicles the history of innovation, and how we need to change our thinking on the subject. Innovation is the main event of the modern age, the reason we experience both dramatic improvements in our living standards and unsettling changes in our society. Forget shortterm symptoms like Donald Trump
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and Brexit, it is innovation itself that explains them, and that will itself shape the 21st century for good and ill. Yet innovation remains a mysterious process, poorly understood by policymakers and businessmen, hard to summon into existence to order, yet inevitable and inexorable when it does happen. DSN
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CONNECT, ENGAGE & EMPOWER Share One-to-One • Easily share content using any chat app on your phone • Effective and compliant suggested messaging • Follow-up prompts and reminders • Multi-language capabilities
Post Engaging Content • Engage across all channels • Social Media sales funnels • Content interaction tracking & notifications • Inbound leads automatically sync to CRM and our smart communications system
Business Dashboards, CRM & Calendar • Enable distributors to view real-time business stats • Easily manage contacts & view interaction history • Send invites, view company events and manage calendar • Facilitate corporate and upline communication
“The data doesn’t lie. The thousands of video shares
we get on a weekly basis from our field is generating enrollment” –Jeremy Wardle, VP Sales, NewULife
R E Qto U Ework S T AforDyour E M Obusiness, ! C O N Tyour A C Tdistributors U S T O D Aand Y your customers! Put the power of NOW
app@successpartners.com / 1.800.752.2030 / successpartners.com
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5 (&
C o u n t i n g)
FROM THE COVID-19 LOCKDOWN THE PANDEMIC HAS A LOT TO TEACH THE INDUSTRY, BUT ONLY IF COMPANY LEADERS ARE WILLING TO LISTEN.
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B Y
S A R A H P A U L K
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IFE LOOKS a lot different today than it did when the calendar flipped to reveal the first day of 2020. It feels nostalgic now to look back on days when masks were reserved for medical dramas on TV, and passports were for gathering stamps instead
of collecting dust in the drawer. Those daily reminders of life interrupted extend into every corner of our lives, and work is no exception. By now, most of us have learned how to run or attend a Zoom meeting, collaborate over Google Docs and connect with co-workers through a screen. We’ve managed to construct make-shift desks in the one room of our homes that offers both quiet and WIFI, and have learned that the mute button is everyone’s friend. There have been some humorous hiccups along the way, as we’ve witnessed pets and kids meander through the backgrounds of video conference calls, the once guarded home lives of our co-workers now on display. But as the chaos and confusion of those early days settled, a rhythm began to emerge that has allowed us to find success in spite of it all. And while the upheaval of this pandemic will surely be temporary, the lessons it has taught the industry and the external brands it comingles with will likely linger long after the lockdown subsides.
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“
Collaboration hasn’t stopped, and innovation isn’t on a break.
Lesson
1
BUSINESS AS USUAL IS A THING OF THE PAST The way we work is different now. Even people who relished working from home found themselves chafing against the restrictions that lockdown introduced. Bustling coffee shops were no longer a safe haven for creative work or casual meetups with colleagues. Independent distributors who relied on large or small gatherings to share products or demonstrate training concepts were forced to rethink their processes and goto methods. Company headquarters and office buildings had to close their doors and pivot to virtual. In a matter of days or weeks, work as we know it drastically changed. In the process, the typical working hours of most businesses have shifted, and with them, the way work is accomplished. But collaboration hasn’t stopped, and innovation isn’t on a break. Many companies report launching even more products and at a more rapid pace than normal, like Elepreneurs, who typically launches two products annually but by summer of this year had already launched three. The strategy sessions and creative teamwork behind what makes successful brands tick hasn’t been eliminated but has instead been heightened as this unusual time requires more of teams than ever before. Face-to-face meetings can be highly productive and will surely resume when it is deemed safe to do so, but the lockdown has taught us that most meetings can be emails, creativity isn’t limited to the four walls of an office, and teams who were effective and efficient during the nine-to-five grind can almost surely be trusted equally when released from the boundaries of that schedule. w w w . d i r e c t s e l l i n g n e w s . c o m 4 5
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AMERICA IS RECL AIMING ITS W OR K-L IF E B A L A NCE Eight-hour shifts and on-the-clock lunch breaks have not been eradicated, but companies that have lagged behind in embracing flexible working schedules are now catching up out of necessity. Now more than ever, employers are realizing that their teams can be made up of talent from around the globe and work seamlessly across time zones. It’s a lesson that younger, cloudbased direct selling companies have been preaching for quite some time, championing the idea that the best and brightest can only be found when the applicant pool is not limited by location. There’s a difference between searching for the best chief financial officer in a specific metro area and searching for the best chief financial officer located anywhere in the world. By liberating the employee pool from geographic limitations, companies will likely boost employee retention in the months and years to come. We know that employees who work from home are more satisfied at work. In a 2019 Owl Labs study reported by Inc.com, employees who worked remotely full-time reported being happy 22 percent more than employees who 4 6 D I R E C T S E L L I N G N E W S |
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Gen Z and the young professionals that follow will be heirs to the fruits of this strange season and will enter the workforce with a shared understanding that work can be arranged to accommodate life, instead of the other way around. worked on-site full-time. Of those who chose to work remotely, 91 percent cited a better work-life balance as their reason. The lockdown has proven what we already knew to be true but were too reluctant to enforce: that work is not one-size-fits-all. Gen Z and the young professionals that follow will be heirs to the fruits of this strange season and will enter the workforce with a shared understanding that work can be arranged to accommodate life, instead of the other way around.
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“ THERE’S A DIFFERENCE BETWEEN SEARCHING FOR THE BEST CHIEF FINANCIAL OFFICER IN A SPECIFIC METRO AREA AND SEARCHING FOR THE BEST CHIEF FINANCIAL OFFICER L OC ATED A N Y W HERE IN THE WORLD.
CONTACT SALES payquicker.com/DSN solutions@payquicker.com
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INS TE A D OF A N ORN A MENTA L A PP TH AT S E R V E D O N LY A S A T O O L F O R C H E C K I N G INVENTORY AND METRICS, THESE LEADERS IN THE DIGITA L SPACE OFFERED DIS TRIBU T ORS THE ABILIT Y TO RUN EVERY ASPECT OF THEIR BUSINESS FROM THEIR PHONE.
Lesson
3
B R A N D S A R E O N LY A S S T R O N G A S T HE IR DIGI TA L G A ME When almost the entire world pivoted to virtual at the same time, it became glaringly obvious who had done their digital homework and who was trailing behind. For the last decade, direct selling companies have applauded their own technological advancements, pointing to back-office improvements and the introduction of mobile apps as their edge over the competition. But it was those who made digital the foundation of all of their 4 8 D I R E C T S E L L I N G N E W S |
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“
Digital is no longer a fringe benefit or cherry on top—it’s the lifeblood of any company that endeavors to succeed in a post-lockdown reality.
processes which truly outperformed their competitors when face-to-face operations ceased. Instead of an ornamental app that served only as a tool for checking inventory and metrics, these leaders in the digital space offered distributors the ability to run every aspect of their business from their phone. Their broad functionality meant samples could be shipped at the touch of a button, educational training resources could be accessed on the go and new customers or team members could be entered without missing a beat. As the ability to meet in person stopped, the demand for training, product demonstrations and mentor relationships did not. If anything, the need for distributor support increased. Under the pressure of a global pandemic, the strengths and weaknesses within each company’s digital strategy proved inescapable. Moving forward, the capacity to operate entirely virtual will be essential. Digital is no longer a fringe benefit or cherry on top—it’s the lifeblood of any company that endeavors to succeed in a post-lockdown reality. Lesson
4
T H E A -T E A M ( & C -T E A M ) I S N O W O B V I O U S This time working separately has served as a sort of truth serum for many companies, determining what—and who— works well without the handholding that comes from an in-person work environment. And although there are certainly w w w . d i r e c t s e l l i n g n e w s . c o m 4 9
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still org charts and office cliques in place, advantages like proximity to the boss’ office or the special treatment that comes from being invited to lunch with the decision-makers in the room is on hold for now. In some ways, remote working has leveled the playing field. Who works well with others, who has a talent for leadership, who is a self-starter, who delegates without micromanaging—all of these character traits have been clarified by this condensed and distilled work model. Any lackluster performance that could be hidden under the veil of group work is now visible, and the true visionaries who ignite original ideas have been given more room to run. This brief moment in history, although it feels enduring, has offered leaders uncommon insight into the assets and shortcomings of their team’s composition. Utilizing this awareness moving forward means leaders must be ready to shift people into new roles that are better suited for their gifts, promote the often overlooked, recognize the leaders that this period of adversity has created, and provide support for the underperforming.
Lesson
Any lackluster performance that could be hidden under the veil of group work is now visible, and the true visionaries who ignite original ideas have been given more room to run.
5
B R A ND S M U S T S TAY AWA R E O F A N A L L -T O O F A M I L I A R C Y C L E : C L A I M S Direct selling has long been the answer to people desiring to exit the corporate world in search of a more flexible and sometimes a more profitable opportunity. But now, more than any time in recent history, people are turning to direct selling as a result of unemployment. As of June 20, nearly 33 million Americans were receiving jobless benefits. That number is five times that of the peak of the Great Recession, according to a July CNBC report. w w w . d i r e c t s e l l i n g n e w s . c o m 5 1
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More training and education will be essential, and a more rigorous policing of these unauthorized claims will be necessary to survive in the future. Recessions have historically been growth years for the industry, as was proven during the Great Recession, when distributors increased from 15.1 million to 18.2 million in number from 2008 to 2014, and the same is proving to be true during the current pandemic. In early June, the DSA conducted a study of 51 companies, of which 51 percent described the pandemic as having had a “positive” impact on their 2020 revenue. That number grew to 59 percent in a later survey. With such a rapid influx of new faces, the direct selling industry is confronting an increased demand for education and training in a time when interactions are limited. Earnest new recruits, on fire to sell the products they are passionate about, can put companies in hot water with the 5 2 D I R E C T S E L L I N G N E W S |
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FTC through false or exaggerated claims about products and earnings. This explosive distributor growth followed by unsanctioned online behavior is an unfortunate cycle the direct selling industry knows all too well, but one it can learn from. More training and education will be essential, and a more rigorous policing of these unauthorized claims will be necessary to survive in the future. As each month leaves our nation hoping for a light at the end of the tunnel, this unanticipated pandemic and its accompanying lockdown likely still has many lessons left to teach. And just like new distributors, companies and the executives who lead them could have a lot to learn—if they’re willing to listen. DSN
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A boutique investment banking, business development and corporate finance advisory firm with a primary focus on the direct selling vertical.
Stuart Johnson, the Founder and Chief Executive Officer of SUCCESS Partners and Direct Selling News, is a cofounder of the new firm. Transformation Capital’s experience and relationships are unmatched within the direct selling community.
SERVICES OFFERED INCLUDE: • Buy side and sell side M&A advisory • Equity and debt financing • Proprietary transactions • Joint venture and partnership opportunities • Institutional advisory
The firm has quickly established itself as a significant resource for direct selling industry participants and is actively engaged in the marketing of potential transactions in excess of $700 million.
Visit us on the web at: www.transformationcap.com or contact our partners directly as follows: info@transformationcap.com | 214-308-6020
Stuart Johnson, Partner | spj@transformationcap.com Ryan Bright, Partner | jrb@transformationcap.com
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C O M P A N Y
S P O T L I G H T
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W O R K S !
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IT WORKS! /
Dreams for a New Season Mark Pentecost is living proof that a coach will always be a coach, whether he’s on the court or leading an industry. His tenacious, “whole ’notha level” approach to leadership has already driven nearly 20 years of success at It Works!, the direct sales business he dreamed up with his wife Cindy in 2001. Today, with his entire family on his team, he’s ready to take on a new season with new products and new vision. BY JENNY VETTER
M
ARK AND CINDY PENTECOST WENT FROM managing their one-income family on a high school coach’s salary to achieving the highest rank of a well-known direct
sales company in the mid-1990s. Experiencing this life-changing success inspired the couple to start their own direct sales company. The Pentecosts launched It Works! in 2001 with a one-of-a-kind body wrap that, to this day, has no competitors in the industry.
MARK PENTECOST
CEO AND PRESIDENT
IT WORKS! FOUNDED:
2001 HEADQUARTERS:
Palmetto, FL TOP EXECUTIVES:
Mark Pentecost, CEO and President PRODUCTS:
Body care, skincare, nutrition and lifestyle w w w . d i r e c t s e l l i n g n e w s . c o m 5 5
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C O M P A N Y
S P O T L I G H T
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W O R K S !
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We have the security of a 20-year-old company that has been through the ups and downs of growth. — M A R K PE N T E C O S T, C EO an d Pr e s i dent
We
We wanted (our company) to be a vehicle of hope for people,” says Mark. “To allow them the time with their family, the debt freedom, and the potential for more for their lives.” Over the last 19 years, It Works! has grown from a mostly self-funded venture to a global enterprise with over 100,000 team members across 24 countries. Have you tried that crazy wrap thing? provided a momentum that sustained the company for years, but today, the Pentecost family has a new game plan, designed around a youngerthan-ever group of savvy social sellers. Today’s It Works! line is designed to help customers feel as incredible as they look, packed with products designed to achieve measurable results. “We reinvented ourselves and are now not only known for our Skinny Wrap, but also our Skinny Brew, a fatburning coffee,” explains Mark. “Both are results-driven 5 6 D I R E C T S E L L I N G N E W S |
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products that are backed by science. The goal is to help our customers achieve results with natural ingredients, incredible flavor and a fun experience to use.” “We believe you can have your cake and eat it too,” adds Pam Sowder, It Works! Chief Networking Officer who has been part of the company since its inception. “We’ve seen our product line expand over the decade, but we’ve stayed consistent in the belief that life’s about balance, and our products help customers achieve that.” With Skinny Brew leading the product line, It Works! offers an extensive collection of nutrition, weight control and energy products, as well as a premier skincare line developed by Beverly Hills plastic surgeon, Dr. Paul Nassif. “We’re offering essential products that people want, need and will continue buying no matter what the economy looks like,” says Mark. “Our goal is to help people sleep well all night and slay all day.” T HE NE X T GENER AT ION While It Works! made its name in households across America through “Wrap Parties” where guests could see the Ultimate Body Applicator in person, Mark and his team could see the virtual tide turning. “We saw the desire in the world for work-from-phone opportunities, even prior to the happenings of 2020,” he says. “We've gotten so young, and it's fun! This younger generation of distributors builds almost solely on social media. They find their preferred platform that allows them to be authentic and genuine—then they take off sharing our products. We’ve come up with a great tool to train and build through social media. It’s a simple, proven concept we’ve brought mainstream to the market today.”
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Our goal is to help people sleep well all night and slay all day. — M A R K PE N T E C O S T, C EO an d Pr e s i dent
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The SAMPLING APP is only one part of the company’s strategy to use digital solutions to get new distributors up and running quickly.
“To make social sharing even easier for this younger demographic of It Works! distributors, the company launched an innovative sampling system,” explains Kami Pentecost, Senior Vice President of Field Development. “It gives loyal customers a quick taste of our key products and provides distributors a simple way to earn cash.” “Prior to the launch of Skinny Brew, we offered keto coffee,” says Kyler Pentecost, Vice President of Sales. “People would literally make their own sample bags, go to the Post Office and spend five to eight dollars on shipping. It was the most horrendous process—so much time and effort. By bringing on the sampling app, it was a very natural fit with who we are as a company. All you have to do is focus your time on that next relationship, that next connection and then you're sending it through your app. So, it makes it super simple, super affordable and right in your pocket, which is what most millennials and Gen Z are doing.”
The sampling app is only one part of the company’s strategy to use digital solutions to get new distributors up and running quickly. “Typically, new team members in the field feel like they have to wait for their Business Builder Kit to arrive on their doorstep,” says Mark. “We said, ‘No more!’ We had to get innovative. How can we get our team making money their first day in business? That’s when we introduced the digital Business Builder Kit and sampling program. Skinny Brew sample credits are applied to new team members’ accounts on day one. They can sell them and earn cash immediately—day one, you’re profitable.” This new generation of social selling distributors is joined by a new generation of Pentecost leaders as well. Mark and Cindy’s children have all joined the business in recent years—Kyler is joined by his sisters Kindsey Pentecost, International President and Chief Marketing Officer and Kami Pentecost, Senior Vice President of Field Development. The younger Pentecosts are loving the company’s focus on empowering an increasingly younger field. “I think younger generations are realizing, ‘I want my dreams now and I can achieve that,’” says Kindsey. “They see how network marketing is a career to get them those goals.” “You’ve got a lot of millennials that are learning that they can work from home,” adds Mark. “They can be debt-free. I love seeing the next generation joining the business. It’s bringing in fresh ideas and pushing us out of the comfort zone. We continue to evolve together!” A W I N N I N G C U LT U R E G O E S G L O B A L Even though his days of coaching basketball in Michigan are long behind him, Mark’s approach to leading It Works! still has “coach” written all over it. But how do you translate that same team mentality to an international field? You model it. “People told me that our culture wouldn’t play well internationally, but it very much does,” he shares. “One of our biggest countries is France. We would talk about how to stay humble and how we give our staff permission when someone's getting a little too big of themselves to call that out. It’s kind of getting a yellow card in sports. You better check yourself. We also gave w w w . d i r e c t s e l l i n g n e w s . c o m 5 9
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each other permission to have fun with that but be really intentional of who we want to be and how we want to model to all of our teams. It was exciting for me to see that our cultures could have a lot of fun and a lot of humor.” It Works! is currently operating in 24 countries with distribution centers in Europe, Korea, Mexico, Hong Kong, Philippines, Australia, Canada and the U.S. Every customer worldwide has access to customer support in their unique language and time zone. “We’ve put corporate field development leaders around the world to support global growth,” says Mike Potillo, It Works! Chief Sales Officer. “This allows us to unify our product offering while establishing a simple system that can adapt to the nuances of that market. Nearly 80 percent of our business is still in the U.S. Our international expansion has just begun, and we have big plans!” B U I LT T O L A S T This year has seen the release of new products, including Sleepy Tea, a relaxing bedtime blend of magnesium and melatonin, as well as new customer incentive programs that are already gaining traction. But perhaps the most exciting announcement of the last few weeks is a new form of virtual connection for It Works! team members. As the global COVID-19 pandemic began to affect businesses worldwide, Mark and his team realized they needed something new. That is when they decided to develop new streaming platform called Impact TV. This new streaming tool will allow the It Works! team 6 0 D I R E C T S E L L I N G N E W S |
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I believe we should reimagine our world to instill confidence in everyone that ‘you are made for more!’ — M A R K PE N T E C O S T, C EO an d Pr e s i dent
to share positive and inspirational content, created to impact distributors around the world. “Impact TV is a place for our team to find media that motivates and inspires them,” shares Mark. “I believe we should reimagine our world to instill confidence in everyone that ‘you are made for more!’” Mark and Cindy didn’t build their business with the immediate future in mind—their sights are always off in the distance. They could never have imagined a 34,000-square-foot waterfront headquarters or sunsets from their private island in the Gulf of Mexico, but they know that the best has yet to come. “We have the security of a 20-year-old company that has been through the ups and downs of growth,” says Mark. “We’ve seen a financial and economic crisis. We’ve learned how to work through a global pandemic, and we are still growing. When people join our team, they have the security of an established business, but the opportunity of a new company. We are introducing new product lines, teaching how to gain huge success through social media and becoming a customer-generating machine. We have the best of both worlds.” DSN
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he commonplace gets modified over time with newer methodologies, but transformation—even in the world of direct selling—meanders through trial and error and sometimes re-emerges closer to the beginning than we expected. Door-to-door sellers of the late 1800s introduced innovative, useful and pampering products to often isolated and ever-curious customers. That’s how the direct selling industry was born. Selling products direct—where retail couldn’t or wouldn’t stretch—lightened consumers’ already heavy load. Quality products earned a loyal customer base for the sellers—often with regular routes—and the companies that would become household names: Fuller Brush, J.R. Watkins Co., Stanley Home Products, and later Tupperware, Avon, Mary Kay and the like. As more than a century of industry transformation unfolded, the focus on customers waxed and waned. Never completely out of mind, customers sometimes fell down the list to other business model priorities. Some direct selling companies and their independent distributors experimented with financial growth strategies that became problematic, controversial and subject to scrutiny by regulators. Amid the switchbacks taken by some companies, however, legacy direct selling businesses flourished by focusing on selling and servicing customers and sponsoring people who wanted to do the same thing. Central to their success was a business model based on actual customers buying real products. Today, these types of companies identify as customer-centric—a newer label for something that’s been around in direct selling as long as the industry itself. Customer-centric companies possess really attractive products that disrupt traditional businesses to the benefit of the consumer, and they represent a 21st c entury direct selling business model that stands up to the expectations of customers, regulatory scrutiny and the sustainability goals for companies and the larger industry.
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As we march into a very different future, one where technology has changed the game, a new type of focus on customer acquisition and retention just makes sense. —JOHN FLEMING, Owner of Ideas and Design Group, LLC; Former DSN Publisher and Editor-in- Chief; and Former Avon executive
“As we march into a very different future, one where technology has changed the game, a new type of focus on customer acquisition and retention just makes sense. No business succeeds and achieves sustainable success without a strong base of real consumers,” says John Fleming, owner of Ideas and Design Group, LLC; former DSN Publisher and Editor-in-Chief; and former Avon executive. W H AT C US T OMER - CEN T R IC L O OK S L IK E T O D AY ? Customer-centric companies embrace their ability to fill a void in today’s marketplace, taking aim outside the channel to compete through product efficacy, value, impact and service. Product performance, pricing, packaging, marketing, customer service, shipping time and costs, loyalty programs and rewards--all of it aims to benefit, engage and retain the consumer. These companies invest in, focus on, track, and measure every facet in order to meet today’s consumer expectations.
“This is worth getting good at! The benefits to the company and the field organization can be massive, long-lasting and far-reaching. Repeat customer purchases create repeat sales and increased revenues. Customer-centric growth is typically more profitable and stable,” says Garrett McGrath, president of Elepreneurs Bouncer Schiro, CEO of Kynect, says the lifetime value per customer is exponentially greater as well. But the customercentric approach isn’t without its hurdles. “In the early days, our biggest challenge was that we were simply growing too fast. Our systems couldn’t keep up, but we solved most of those issues by listening to and focusing on the needs of our customer.” “A quality product that provides high value is essential to get the consistent on-going purchases from your ever-growing customer base. The most significant elements to get us there were first of all to ensure that our compensation plan was focused on customer acquisition and ongoing customer sales. w w w . d i r e c t s e l l i n g n e w s . c o m 6 5
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Secondly, we needed to have direct and consistent communication with our customer base around what about our products they like, what new products they were looking for and how we enhanced our preferred customer program,” says Stuart MacMillan, president of MONAT Global. Customers are empowered these days, and their expectations are evolving. They find products and services at a click or with a simple voice command through e-commerce platforms. Most growing direct selling companies have robust customer acquisition and retention abilities online, as well as sophisticated point-of-sale systems that capture customer information and feeds data for all sales motions back to the home office. “Direct selling companies that recognize themselves as platforms and provide the digital tools which enable distributors to market in a more personal manner will support a redefining of the direct selling model,” says Fleming. QUICKENING THE PACE OF T R A NSF OR M AT ION Technology is facilitating a transformation of the direct selling model, but it’s regulatory scrutiny that is—or should be— quickening the pace of companies to lean in to their customers. The MLM regulatory landscape shifted in the U.S. with Federal Trade Commission lawsuits filed against Vemma Nutrition (2015) and Herbalife (2016), and more recently AdvoCare and Neora. These cases reflect a heightened scrutiny of both MLM compensation structures and unsubstantiated earnings claims. Companies have paid hundreds of millions of dollars in restitution; spent millions overhauling operational systems; restructured compensation plans; and in AdvoCare’s case, dismantled its MLM structure entirely. While this type of scrutiny is not new, Brent Kugler, attorney with Scheef and Stone, says, “Today’s MLM company must have a compensation plan that in structure, practice 6 6 D I R E C T S E L L I N G N E W S |
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and terminology emphasizes compensation and rewards based upon bona fide retail sales activity. Just as importantly, MLM companies should accurately and transparently disclose the earning or lack of earnings of all program participants, not just the participants who earned commissions in a given time period.” The FTC has made clear that it intends to hold companies responsible for improper earnings claims made by their distributors and to expect aggressive scrutiny of MLM compensation plans that include threshold-based and duplication-based rewards. Older comp plans that define volume and base rewards on distributor purchases need revision and rewriting to emphasize retail sales and rewards to distributors for verified retail sales activity instead. Calculations of distributor commissions, likewise, should generate from retail sales to non-distributors and omit personal purchase volume because it no longer counts in rank advancement. MLM purchase requirements should also change to minimum sales requirements.
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This is worth getting good at! The benefits to the company and the field organization can be massive, long-lasting and far-reaching.
“In the current regulatory environment, every MLM company needs to be taking a hard look at its compensation model and how it is deriving its revenues,” says Kugler. Recent FTC rulings indicate that companies—to remain compliant and not be labeled as pyramid schemes—must demonstrate actual retail demand for its products and services. This means a healthy majority of company revenues should be generated from bona fide sales to actual, non-distributor customers. Ideally, a customer-to-distributor ratio of 5:1 or higher is the aim, says Kugler. DISTINGUISHING BE T WEEN ICING AND CAK E “The customer purchase decision must be able to stand on its own as a ‘fair trade,’ and then the personal touch by a caring consultant and the opportunity to earn by also supporting customers’ purchases is the icing, not the cake,” says Orville Thompson, co-owner and co-CEO of Scentsy.
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Direct selling business models need to distinguish between icing and cake in order to remain FTC compliant. Customers do not have a representation agreement in place with a direct selling company. Distributors do have an agreement in place with a direct selling company. Differentiating and tracking purchases of active customers and distributors is vital because “actual” customers engage, purchase and continue to do so for enjoyment, not for the purpose of qualifying for some component of a compensation plan. “The entire validity of direct selling is predicated on real customers, buying real products at real prices. By focusing on the customer and the product or service value being provided to them, companies can make decisions that bring sound business results while enhancing the direct selling environment,” says Thompson. “If the product is relevant, distinguished and desired, then people will want it without having to start a home-based business. Indeed, if a direct sales company truly loved its distributors, it would ensure they succeed by having a high percent of their business done through retail sales,” says Jeff Bell, CEO of LegalShield. “The only real money in direct sales is from a consumer who is engaged, satisfied and retained.
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Having a model focused upon signing up distributors is not only reckless but potentially illegal,” he adds. “I believe that the days of just selling opportunity are long gone and that we have to lead with customer experience, customer education, and customer value,” says Brian Underwood, owner and CEO of Prüvit. “If education and growth aren’t the focus and you build it based on the deal or opportunity, there is always another million-dollar deal out there, right around the corner. It doesn’t create any real new value or innovation,” he adds. T H E B E N E F I T O F R AV I N G FA N S AND CUSTOMERS Distributors need valuable and innovative products and services to build a strong book of business. A high level of consumer experience generates repeat sales of in-demand products, and those loyal customers become the heroes of customer-centric direct selling companies. “It Works! is a customer generating machine!” says Mark Pentecost, CEO. “This year, we’ve hit record sales with 75 percent of all of our sales coming from customers. That is industry changing!” They boast a 9:1 customer -to -distributor ratio. “I think every company that has succeeded at a massive level is because of the benefit of having raving fans and customers. Raving fans share their passion with other people, which helps continue the company’s growth,” says Underwood. “If you focus first on the value you’re offering your customers, your business proposition becomes more powerful and sustainable. Kynect’s customer-to-Associate ratio is 9:1, not because of the FTC’s influence but because our main focus is creating value for our end users. Then we worry about the business opportunity,” says Schiro.
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“Beyond the obvious regulatory environment, the reality is that the success of any direct selling company is based on providing high-quality products and services to customers. Without a strong customer base, a company cannot have sustained stability and long-term growth. A steady, stable group of customers that desire the products we have, creates confidence in our new Brand Partners, thus empowering them to share the business opportunity,” says Jeff Olson, founder and CEO of Neora. “Customers have always been important to sustainable business growth. In our space—and in these unprecedented times—companies who produce impactful, affordable products and serve their customers well are outperforming those who are not. FTC Guidelines are pointing all direct selling companies in this direction. This IS the future of our industry,” says McGrath.
RECOGNIZING CUSTOMER-FIRST COMPANIES With that future in mind, Direct Selling News launches a new Customer Centric Recognition program celebrating direct selling companies that boast high customer-to-distributor ratios and prioritize actual customer sales. “Businesses built on customer acquisition and retention, especially those that meet the 5:1 and 10:1 customerto-distributor qualifications of DSN’s CCR will be the competitors to beat in this marketplace and environment,” says Stuart Johnson, founder and CEO, SUCCESS Partners. “What gets measured—and recognized—gets done. With Direct Selling News having created the Customer Centric Program to recognize customer-first companies, it cannot help but have a positive impact on our profession,” says McGrath. “Recognition that our company is built by providing quality
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products to customers who love and re-purchase them will serve to separate us from companies that are more focused on distributor acquisition and churn. We believe our model results in a more sustainable business for our Brand Partners, and therefore the company as a whole,” says Olson. “More than two million people have felt the Total Life Change through our products, and we are hungry for more to experience it. That’s why we are so excited to be a part of this DSN effort and doing what’s right for our customers, our Life Changers, and our entire industry,” says John Licari, COO of Total Life Changes. “DSN’s recognition has been a strong driver to company behavior for many years. Direct selling organizations have strived for the recognition and rewards that DSN has offered. As the direct selling channel faces increased scrutiny, we are super supportive of DSN’s focus on customer acquisition and retention. We believe this will be instrumental in focusing companies on healthy, long-term sustainable growth and enhance the reputation of a channel we have come to appreciate and so many millions of people rely on,” says MacMillan. “It is so exciting to launch a recognition of the values, integrity and behaviors that will move our industry into a more sustainable future,” says Johnson. The new CCR Program will be open to companies with a minimum of one year in business and $5 million in annual revenue. Active customers and distributors are limited
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to those in the U.S. and Canada. More details can be found at www.directsellingnews.com/ccr/. RE-EMERGING MORE V IBR A N T T H A N BEF ORE But actual transformation takes more than recognitions. In this regulatory environment customer centric-ish won’t be enough for the direct selling industry to re-emerge more vibrant than before. “Customer acquisition, service and retention shouldn’t be the window dressing. It should be the absolute foundation of who we are!” says Andy McWilliams, CEO of RevitalU. He believes subtraction is necessary too. “Get rid of fees to join, big pack purchases and recruitment bonuses thinly veiled by customer acquisition minimums! LET’S CHANGE!!” The days of direct sellers purchasing inventory and servicing customers personally is falling away. More companies are facilitating purchases and fulfilling orders for their distributors—while at the same time changing distributors’ customer acquisition expectations. Fleming says 20 or more loyal customers, who purchase frequently, is certainly the possibility for any direct seller who focuses on customer acquisition and retention. “This changes the game and becomes foundational to a future that appears to be bigger and brighter. Those who aspire to be micro-entrepreneurs, or even entrepreneurs, will benefit from sharing with others this unique model, and sponsoring others who adopt the new behaviors. More focus on customer acquisition and retention will result in a much stronger business model for all involved. It’s exciting. Direct selling will also become a much more vibrant player in the general marketplace!” says Fleming. DSN
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LIMELIFE /
LimeLife by Alcone: Defining Empowerment Giving women the tools to create an inspired future. BY JENNY VETTER
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Real female empowerment is helping women define an inspired future for themselves and to give them the tools to actually create that inspired future. — M I C H E L E G AY, C o - F o u n d e r
A BEAUTY LEGACY The Alcone Company of today has roots in the professional beauty industry that were planted in the early 1950s in the heart of New York City’s growing theater scene. Originally founded to sell theatrical makeup and showgirl lashes to Broadway starlets, Alcone would eventually be purchased by the Mallardi family in 1982 to complement their own theater-serving business—Mutual Hardware, a provider of professional hardware used in both stage and screen productions. Today, both Alcone Company and Mutual Hardware are still serving the entertainment industry led by members of the Mallardi family. When Michele Mallardi Gay made the dramatic career shift from science teacher to leading the family beauty business as CEO of the Alcone Company, she saw an opportunity to try something new. “When I realized that I was staying long-term in this family business leadership role, I started thinking about ways that we could build more community for professional makeup artists,” she says. “We thought, what if we just took our best products that we sell to professional makeup artists that they use all the time and put them in one line? So rather than sending their customers to Alcone with a shopping list, the makeup artists could actually sell them the product right there and earn a sales commission.” 74 D I R E C T S E L L I N G N E W S |
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Lessons from the Lockdown A Free Resource for Direct Selling Executives
There’s nothing normal about our new norms. Direct selling was already changing at a breakneck pace. Now, not only have those changes accelerated, but everything we had planned for needs to be recalibrated, or scrapped entirely. There’s no best practices to refer to. No proven method to follow. We’re all facing uncharted territory.
What’s the Best Next Step When You Don’t Have a Map? We’re creating and collecting some of the most timely insights from within the direct selling channel, and making it all available in our Lessons from the Lockdown section on our website. Articles, surveys, examples and even interviews … you’ll find it all at StrategicChoicePartners.com/lockdown. Whether you’re surging into double digit growth or screeching to an unprecedented halt, we can help.
Tap into Lessons from the Lockdown now at StrategicChoicePartners.com/lockdown
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C O M P A N Y
S P O T L I G H T
/ L I M E L I F E
“
Because none of us knew what we were doing, we had no direct sales background. We actually were able to build a culture that felt authentic to us. — M I C H E L E G AY, C o - F o u n d e r
Michele and her team understood professional makeup artists—Alcone’s professional line of makeup has a cult following in the industry and can be seen on famous faces all over the world, from Jennifer Lopez to Kim Kardashian. Makeup artists are like family to Alcone, and Michele was determined to find a way to generate an income stream that was independent of an industry that can often be feast or famine. “When we started running the reports of what that would look like, it really wasn’t going to give them a significant enough revenue stream,” she explains. “Basically, what we did is we built a direct sales model backward. We asked the question, ‘How can we help makeup artists receive a real significant revenue stream as a supplement to their career?’ And where we ended up was direct sales.” With no direct sales experience, Michele started doing “Alcone at Home” parties with a few close friends and family, introducing the products to women and learning as she went. 7 6 D I R E C T S E L L I N G N E W S |
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“We started to get all these other people who didn’t know what they were doing, but they had strengths in all walks of life,” she shares. “And because none of us knew what we were doing, we had no direct sales background. We actually were able to build a culture that felt authentic to us”. Alcone at Home would soon become LimeLife by Alcone, and Michele would be joined by her niece and LimeLife cofounder, Madison Mallardi. “When we started, we only had about 50 Beauty Guides, and every time we got a new starter kit order, we would ring a bell because we celebrated every single Beauty Guide that joined,” shares Madison. “And then over time it just started picking up, and we were dinging the bell and dinging the bell. And that’s what we’ve been doing ever since. We still ring a hypothetical bell every single time someone joins, because it’s just so exciting when someone puts their trust into the company and in us as leaders.”
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MORE THAN MAKEUP Michele and Madison launched LimeLife with eleven of Alcone’s most popular makeup products but quickly expanded to skincare as well. Today, LimeLife offers a comprehensive selection of skincare, makeup, men’s products, beauty tools and accessories. A field team of over 30,000 Beauty Guides in nine countries share both LimeLife products and the business opportunity around the world. “We create products that we would want to use and that professional artists need,” says Madison. “The way we develop our products and the way we define what to develop solely comes from our sales field. It’s really about finding products that are going to be staples in people’s lives and that people are going to hopefully become loyal to, to the point where they can’t turn back, and creating classics.”
While LimeLife offers an exceptional line of products, both Michele and Madison see LimeLife’s business opportunity as the best thing the company offers. “My ‘why’ is for women to understand their worth and be paid for it,” adds Michele. “The basis of our mission is in empowering women, and we do that in three ways: from a personal angle, from a business angle, and from a financial angle. At the end of the day, making sure that our compensation plan is paying out the absolute amount that it can possibly payout and getting as much money into the hands of women as we can.” But Michele wanted more than a generous compensation plan. She wanted to empower women to think beyond the money they could make with LimeLife today and tomorrow to
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C O M P A N Y
S P O T L I G H T
/ L I M E L I F E
IN T WO YEARS, LIMELIFE EXPANDED INTO
8
COUNTRIES OUTSIDE THE UNI T E D S TAT E S
CANADA, U.K , FR ANCE,
I TA LY, I R E L A N D , G E R M A N Y, SPAIN AND AUSTR ALIA
investing and managing wealth that could affect their families for years to come. Her own experience with seeking out funding for LimeLife would inspire her next move. THE FEMPIRE FUND Creating the direct sales arm of Alcone required funding, and a lot of it. “I had mortgaged everyone’s house, and I had mortgaged our businesses,” shares Michele. “But the risk for my family was way too high—I’m talking about my siblings, my four siblings 7 8 D I R E C T S E L L I N G N E W S |
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and my father. We got some outside funding from friends and family, which was great, but we were still growing way too fast.” A chance email from the beauty giant L’Occitane would change everything. Chairman Reinold Geiger requested a meeting with Michele and Madison, believed in what they’d created at LimeLife and invested in the business. “He invested in LimeLife immediately,” says Michele. “And he says, ‘I want you to have complete control, complete decision making. I’m just giving you money. I want to see what happens. I believe direct sales is the future.’ This was a blessing from nowhere, and when I started looking into how many female entrepreneurs get that blessing, it’s so few.” She developed an idea that could realize two dreams at once—The Fempire Fund— an investment vehicle that could simultaneously provide funding for up-and-coming female entrepreneurs and reward high performing LimeLife Beauty Guides. Once a Beauty Guide hits a specific rank, LimeLife rewards them with a share in a bonus pool that is used to fund a portfolio of entrepreneurs. As the fund grows, their gifted
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investment grows. Additionally, qualifying Beauty Guides are given their first $5,000 in investment returns as a predistribution, with encouragement to diversify. “I encourage them to put it in the stock market or in something that has long term growth,” she explains. “Basically, what I’m trying to show them is direct sales is a compounding business, and you can take your earnings from that and further compound it in the financial institutions that we’re so blessed and lucky to have access to.”
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E M P O W E R I N G W O M E N— E V E R Y W H E R E The partnership with L’Occitane allowed LimeLife to expand internationally at breakneck speed. In two years, LimeLife expanded into eight countries outside the United States— Canada, U.K, France, Italy, Ireland, Germany, Spain and Australia. Jacob Hyzer, CEO of Emerging Markets, has been with LimeLife from the beginning, building teams focused on compliance, training and support for Beauty Guides. “A challenge was finding, in a short time of such vast expansion, how do we maintain our vision for the culture of the company,” he shares. “For Michele, Madison, and myself that was such a huge, important priority—maintaining the culture of the company.” Jacob and his teams created similar protocols across the countries in which new Beauty Guides chose from one of two starter kits and then begin an onboarding process that involves online learning, live trainings and interacting with other Beauty Guides through Facebook groups. “Our Beauty Guides are so incredible because they work in such a collaborative way,” he explains. “There are Guides who aren’t even on the same team, who don’t make any money off of each other at all, who are so willing to jump over into someone else’s team to do trainings, to offer coaching, to offer feedback, to offer insight and how to do it.” The company’s explosive growth shows no signs of slowing, with upcoming product launches, a new leadership training program, and its first virtual annual convention, which will allow even more Beauty Guides from around the world to participate. As LimeLife looks to empower more women in more countries, Michele holds fast to her “why.” “Real female empowerment is helping women define an inspired future themselves,” she says. “And to give them the tools to actually create that inspired future.” DSN
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Thirty-One Gif ts/Kanbrick Investments
What is the Story Here? BY
J O H N
F L E M I N G ,
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C O NTR I B UTI N G
ED ITO R
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O
N JULY 15, 2020, Katherine Chiglinsky splashed the news on Bloomberg; ThirtyOne Gifts, founded by Cindy and Scott Monroe in 2003, a direct selling company, now had a new partner. Kanbrick, the new investment firm founded by Tracy Britt Cool and Brian Humphrey, had taken a stake in Thirty-One Gifts. Kanbrick, recently founded in 2020, is brand new to private equity investment, and Thirty-One is their very first deal. For those of us who follow the direct selling model, we knew what the key questions would be: What’s behind the story? What is the story here? Whenever privately held companies enter into agreements with each other, we may never know the story, but this is an attempt to tell the story from a perspective that has been closer than most. I was invited to share a perspective because the editors at Direct Selling News knew that I had served in Cindy Monroe’s advisory group for several years. While we engaged in the typical quarterly conversations, review of some reports, and business strategy, we were never involved in decisions relative to the financial investments or potential partnerships. However, through several years of evolvement, it became obvious that Cindy and Scott had a vision for Thirty-One that went beyond the offering of great products designed to fill the needs of women. The quotes below, by Cindy Monroe, are lifted from the Thirty-One Gifts website, and they tell part of the story: “I founded Thirty-One Gifts in 2003 with one simple goal in mind—to help women by giving them the opportunity to run their own successful business. That goal remains our No. 1 priority today. “Not only do our fashionable, functional products make life easier—they also help independent business owners across the country support their families and reach their dreams. “Over the past 15 years, our sales Consultants have held over 6 million parties. Along the way, we’ve also been blessed to give back to organizations that share our mission in North America and around the world. You can learn more about our history below.
“
We all have a ‘why’ —a reason for doing the things we do. Maybe yours is Family, Friends, Faith, Flexibility. Maybe it’s just having fun. Our why is to help you reach yours. — CINDY MONROE , Thir ty- One Gif ts Founder
“We all have a ‘why’—a reason for doing the things we do. Maybe yours is Family, Friends, Faith, Flexibility. Maybe it’s just having fun. Our why is to help you reach yours.” Thirty-One Gifts has always been about empowering women as they introduced innovative products, marketing and selling them through a sales organization of independent consultants, utilizing a direct selling model. Tracy Britt Cool also has experience in leading a direct selling company. She worked for Berkshire Hathaway for over ten years, working directly under the tutelage of Warren Buffett and gaining the recognition of protégée. While at Berkshire Hathaway, she held a variety of roles, including financial assistant to the chairman, board member of Kraft Heinz, and chairman of several Berkshire Hathaway companies. Most notably, in 2014, she was tapped to become CEO of Berkshire Hathaway subsidiary Pampered Chef, and… she was only 29 years old! w w w . d i r e c t s e l l i n g n e w s . c o m 8 1
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F E A T U R E /
T H I R T Y - O N E
G I F T S
O
n September 19, 2019, DSN carried an article about Tracy stepping down. Noteworthy is what the DSN Staff wrote about Britt Cool at that time to describe her five-year tenure at Pampered Chef: “Over the last five years, Pampered Chef focused on rebuilding the foundation of the business and creating new engines for growth through a renewed focus on the independent consultant base, a refreshed brand, enhanced product innovation, expanded international footprint and significant digital channel growth. Following more than a decade of decline, the company has meaningfully grown sales and earnings over the last five years. It has grown into a strong and diverse business with more than 50 percent of Pampered Chef’s business now coming from digital sales, up from approximately 10 percent in 2014.” In the same article, Warren E. Buffett, chairman and CEO of Berkshire Hathaway, was quoted as saying: “Five years ago I asked Tracy to redirect and re-energize Pampered Chef. Direct selling was encountering new challenges, and Pampered Chef’s sales and earnings had been declining. Under Tracy’s leadership, major financial gains have been achieved. Even more important, our corps of consultants is rapidly growing and prospering. Tracy is handing Andrew (Andrew Treanor, the former COO who was elevated to CEO) a company infused with excitement and momentum.” During her five years as CEO at Pampered Chef, Tracy focused on rebuilding the foundation of the business, innovation, expanded international footprint and significant digital channel growth. This was a lot to take on, and evidently,
Cindy Monroe
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“
I founded ThirtyOne Gifts in 2003 with one simple goal in mind—to help women by giving them the opportunity to run their own successful business. That goal remains our No. 1 priority today.
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the type of challenge Tracy embraced. Following more than a decade of decline, Pampered Chef appears to have grown into a strong and diverse business. Pampered Chef has shared that more than 50 percent of the business now comes from digital sales, up from approximately 10 percent in 2014. Most significant about the previous statement is the growth in digital sales reported in 2019, well before COVID-19. Doris Christopher, founder of the Pampered Chef had this to say about Tracy: “As a founder, I couldn’t have asked for a better leader and partner in rebuilding Pampered Chef than Tracy. She has played a critical role inleading the company’s transformation and building a strong team to continue our growth. I’m confident in Andrew’s leadership and Pampered Chef’s growth, and I’m excited for what Tracy will do next. I know she will be successful in building even more companies and will be a strong partner to founders, entrepreneurs and management teams.” Tracy Britt Cool left the Pampered Chef to plan her next steps. She did not go back to Berkshire Hathaway. Her new investment company, Kanbrick, was looking for its first deal, and they chose Thirty-One Gifts. There are also clues to the answers to the questions we presented earlier: What’s behind the story? What is the story here? When Tracy left Pampered Chef, digital sales had grown from 10 percent to 50 percent. Obviously, this would make it easier for Pampered Chef Consultants to share their products and build their businesses beyond a physical party plan sales environment. Pampered Chef is, or was, a party plan company. Under Tracy’s leadership, Pampered Chef embarked upon a different future for a party plan company, a future that
embraced more use of digital platforms in support of how products and services are marketed and sold to consumers. The comments by Warren Buffett and Doris Christopher reveal clues when they refer to: “new excitement and momentum…the leadership and partnership Tracy brought to Pampered Chef.” From this perspective, Thirty-One is a party plan company ready for innovation and possibly reinvention that will be accelerated by Tracy and her team at Kanbrick. Thirty-One, quite similar in many ways to Pampered Chef, is a familyfounded business, focused on strong principles and values along with innovative products and missions to empower women. Tracy knows this deal! The Thirty-One business family is expected to benefit from both acceleration and innovation. Elizabeth Thibaudeau, a seasoned executive with contemporary direct selling experience, has already been designated as the new chief executive officer at Thirty-One. When I reached out to Cindy to capture a few more thoughts, she also shared: “I believe that Thirty-One Gifts partnering with Kanbrick will bring new thinking and skills to an already strong brand and culture. I am most excited about the long-term commitment to growth and opportunities that this partnership can offer our Thirty-One consultants as well as our industry.” Tracy also shared: “We created Kanbrick to provide business owners and founders a long-term home for their businesses. We are excited to welcome Thirty-One to Kanbrick. Thirty-One has a great history, strong brand, and a differentiated sales model, and we look forward to partnering to support the sales field to grow their businesses and to provide more opportunities to expand their selling opportunities digitally.” I believe this story is another of the stories we will learn from. It is the beginning of a new story, and that is the real story! DSN JOHN FLEMING, OWNER OF IDEAS AND DESIGN GROUP, LLC; FORMER DSN PUBLSIHER AND EDITOR-IN-CHIEF; AND FORMER AVON EXECUTIVE.
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TEACHING TOMORROW’S BUSINESS LEADERS DSEF Fellows Make a Difference for Direct Selling More than 190 DSEF Fellows are changing the way direct selling is taught in universities across the US by using the Foundation’s teaching content, research
“The DSEF pedagogical support materials address real-world, timely marketing practices. I especially like the CUTCO/Vector ‘The Cutting Edge of Quality’ video case. It not only highlights a successful approach to disintermediation and direct selling, it reinforces the importance of sales as the sole driver of creating revenues in any firm. DR. LOU PELTON Associate Professor of Marketing University of North Texas
“As a DSEF Fellow, I was able to develop a teaching case that connected my research interest in effectuation and social entrepreneurship with the founders of Trades of Hope. As a bonus, many students were introduced to the direct selling distribution channel as an avenue for social entrepreneurship. DR. CHRISTINE MOLLENKOPF-PIGSLEY Assistant Professor & Program Director Applied Organizational Studies Minnesota State University Mankato
and case studies. Here’s what they have to say about how DSEF benefits students and direct selling.
“My students have pointedly benefited from DSEF case materials. The Big Data video is highly insightful and garners substantial discussion. The Cocoa Exchange case, particularly the related video, is wonderful for discussing corporate social responsibility, women’s empowerment and direct selling. DR. WILLIAM F. CRITTENDEN Professor, International Business and Strategy Northeastern University
1667 K Street, NW, Suite 1100, Washington, D.C. 202-452-8866 • info@dsef.org • www.dsef.org
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O N E
V O I C E
/
D S A
M E S S A G E
On Opportunity, Freedom, and Equity for All…
T
his year has landed us all amid events larger than any of us as individuals, community members, and businesspeople might have imagined, not the least of which is the galvanized awareness of inclusive diversity and equity issues across the country. Years ago, thoughtful industry leaders established the DSA Diversity and Empowerment Committee as a permanent part of the DSA Board with the goals of broadening the opportunity we offer and better reflecting our constituents (who come from every background and skin color) in company, industry and Association leadership. We have made progress, but it hasn’t been enough. The events of recent months have highlighted the need for all of us, including direct sellers, to take the next necessary steps to ensure that the American dream of opportunity, freedom, and equity that direct selling embodies, is a reality for all. That is why I have been so gratified to see the universal commitment to these ideas, in theory, and practice, being espoused by direct selling leaders in our initial discussions among CEOs and the DSA Board. As a result, DSA had committed itself to providing resources to direct selling companies as they work to ensure that we are the best examples of equal opportunity and inclusion for all, regardless of race or other considerations. Our Diversity Council, chaired by Jeff Reigle of Regal Ware, and a committed team of DSA and DSEF management executives, have embarked on the first steps of an ambitious program of activities to support the industry in its efforts, including: • data gathering on racial demographics for benchmarking, • coordination with other business groups committed to diversity, • creating a forum for direct sellers to publicly announce their commitments and actions, • educational programming for direct
JOSEPH N. MARIANO is the President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.
selling companies about inclusive diversity and equity, • support of minority-owned small businesses and suppliers, and • fostering industry commitment to enhancing minority leadership in our companies and in our Association. To that end, DSA is collaborating with Ameli Global Partnerships. Founder and principal Mona Ameli is not only nationally certified in Diversity & Inclusion and a globally certified Cultural Transformation consultant, but she also knows our industry intimately. She has 20-plus years of executive experience with several large and medium-size companies and served as the Chair of the DSA’s Diversity and Empowerment Council for three consecutive terms. She has been committed to and a leading voice in our industry’s diversity and inclusion efforts. Mona, Jeff, and a wide array of DSA member company executives have begun the hard work of turning their commitment into concrete, measurable action through a series of webinars and discussions designed to provide member companies with tools to assist them in efforts to successfully increase and retain participation of a more diverse base of employees, field members, and suppliers. These sessions are our first step in a series of tangible activities and resources the DSA is providing all its members to keep our ongoing commitment to this cause and to provide direct sellers with the tracking and strategic tools to measure the business efficacy of company D&I initiatives. Ultimately, though, our efforts aren’t about merely dollars and cents, SKUs or productivity rates. Ultimately, this is about what has always been at the heart of direct selling—our commitment to the American dream and promise of inclusion, equity, and opportunity in which everyone can share. #stronger together #community DSN
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8 6 D I R E C T S E L L I N G N E W S |
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TO BE INCLUDED IN THE VENDOR DIRECTORY, CALL 1-800-279-5249
300 Shorland Dr., Walton, KY 41094 800-978-9307 www.verstlogistics.com
Verst offers robotic picking, 99% order accuracy, 6.5+M sf scalable warehousing space, air/rail-served, 1-2 days to over 85% of the U.S. Services include pick-pack, labeling, kitting, and custom packaging. Our Business Is… An Extension of Your Business
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PMS 7686
KATAPULT EVENTS 5840 Red Bug Lake Rd, Ste. 140 Winter Springs, FL 32708 407-915-9060 www.katapultevents.com Fresh. Exciting. Bold. Your field deserves the best and we help you deliver. Out-of-the-box creative production with experienced show management. We execute on budget and make you look AMAZING!
Since 2007, Hanna Shea Executive Search has been the go-to search firm in support of the direct selling industry. Hanna Shea finds top talent for companies in need of building or improving an executive leadership team for organizational success.
ATLANTIS PARADISE ISLAND
E.A. DION, INC. 33 Franklin McKay Road Attleboro, MA 02703 800-445-1007 www.eadion.com
A full-service event production company specializing in helping DSA’s tell their stories. Creativity + Technology = Unforgettable Experiences.
Dion’s jewelry solutions are perfect for career path, sales & recruiting, corporate anniversaries and incentive travel recognition awards.
SEPTEMBER 2020
Fossil Group is a global watch company specializing in the innovation and design of watches, wearables, jewelry, and leather goods. Our owned brands include Fossil, Michele, Misfit, and Skagen, and licensed brands, Armani Exchange, Diesel, Emporio Armani, kate spade new york, Marc Jacobs, Michael Kors, Misfit and Tory Burch.
1080 Caribbean Way Miami, FL 33132 Royal Caribbean International’s Corporate Sales Team 800-529-6916 www.royalcaribbeanincentives.com
Create lasting memories for your top producers. Reward & WOW them with a resort experience nestled in the world’s largest open air aquarium.
MULTI IMAGE GROUP
FOSSIL GROUP 901 S. Central Expressway Richardson, TX 75080 469-730-7619 www.fossil.com
ROYAL CARIBBEAN INTERNATIONAL
1000 S. Pine Island Road Plantation, FL 33324 800-722-2449 www.AtlantisBahamas.com/meetings
1701 Clint Moore Road Boca Raton, FL 33487 800-523-2682 www.mig.cc
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INCENTIVES/RECOGNITION
HANNA SHEA 1835 W Chandler Blvd 103, Chandler, AZ 85224 844-344-7177 www.hannashea.com
ICONIC SHIPS. EPIC ADVENTURES. ULTIMATE EVENTS. Royal Caribbean® transforms events into the ultimate productivity paradise. Impress your attendees with epic venues, vibrant restaurants, onboard thrills and beautiful destinations.
M A NUFA C T UR ING/ P R OD . DE V E L OP ME N T
Excite & ignite your direct sales force by using Bartha—the highest quality event production and staging company nationwide!
E XECUTIVE RECRUITMENT
BARTHA 600 N. Cassady Avenue Columbus, OH 43219 800-363-2698 www.bartha.com
INCENTIVES/RECOGNITION
E VENT PRODUCTION
Vendor Directory
PROGRESSIVE LABORATORIES
3131 Story Road W Irving, TX 75038 972-518-9660 www.progressivelabs.com 40+ years of quality manufacturing of nutritional formulas specializing in capsules and powders. FDA registered and 3rd party UL certified facility.
SMART OFFICE SOLUTIONS, INC.
217 N. Westmonte Drive, Ste. 1007 Altamonte Springs, FL 32714 800-891-8601 www.SmartOfficeSolutions.com Your mobile strategy should be as smart as the phone in your pocket. Make a powerful statement about the value of social networks and personal connections with the SmartMobile app. Transform every share, text, call, and email into a positive sales and recruiting result.
SUCCESS PARTNERS 5800 Democracy Drive, Suite 100 Plano, TX 75024 800-752-2030 www.successpartners.com GROW NOW! The SUCCESS Partners’ NOW app drives results for direct selling companies making it incredibly simple to connect, communicate and convert. A mobile system designed for maximum duplication that promotes customer acquisition activityNOW. Contact us for a demo today!
BYDESIGN TECHNOLOGIES 9503 Princess Palm Avenue Tampa, FL 33619 813-253-2235 www.bydesign.com Award winning SaaS solutions including Geneology Management & Commissions, Inventory, Replicated Websites, Premier Rep Tools, Branded Mobile App, Virtual Parties, E-vites, Hostess Rewards, Bookings, Social Sharing, Promotions, & Shopping.
S O F T WA R E / T E C H N O L O G Y S O L U T I O N S
SUCCESS Partners is a full-service agency that creates strategies and solutions for direct selling companies to strengthen their brand, engage customers and boost their bottom line.
MOBILE APPS & COMMERCE
SUCCESS PARTNERS 5800 Democracy Drive, Suite 100 Plano, TX 75024 800-752-2030 www.successpartners.com
S O F T WA R E / T E C H N O L O G Y S O L U T I O N S
MOBILE APPS & COMMERCE
MARK E TING/BR ANDING
TO BE INCLUDED IN THE VENDOR DIRECTORY, CALL 1-800-279-5249
DIRECTECH LABS 929 Colorado Ave Santa Monica, CA 90401 310-730-1246 CustomerCare@directechlabs.com www.directechlabs.com The AI-powered messaging and analytics platform. Be a better opportunity in the gig economy. Actionable dashboards and automated opportunities that get your field and customers engaged into measurable action anywhere in the world.
EXIGO 1600 Viceroy Dr., Suite 125 Dallas, TX 75235 214-367-9933 www.exigo.com The global leader in cloud-based Platformas-a-Service (PaaS) for direct selling companies. An open framework for billiondollar giants to startup companies. Exigo supports MLM, Party Plan and Affiliate models, operating in single global markets.
SOCIALSALES.IO
DIRECTSCALE
INFOTRAX SYSTEMS
2024 W. 15th St., Ste. F-324 Plano, TX 75075 214-659-1549 hello@socialsales.io www.socialsales.io
350 South 400 West, Ste. 225 Lindon, UT 84042 801-701-3285 www.directscale.com
1875 S. State Street, Ste. 3000 Orem, UT 84097 801-431-4900 www.infotraxsys.com
Scalable software for your company and your sales force that’s delightful and easy to use.
Software & SaaS solutions for startup, emerging, and global direct selling companies. See our ad on the back cover.
Convert your social fans into paying customers. Our global SaaS platform includes the tools your sales force needs to succeed in today’s social selling environment. Scalable to fit any sized organization from startups to large global enterprises.
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1208 E. Kennedy Blvd., Ste. 222 Tampa, FL 33602 813-277-0625 www.idstc.com
Global Operations Management Software. Advanced Comp Plan Programming. Sales Force Backoffice & Automation. Web Site Design & Replication.
JENKON 203 SE Park Plaza Drive, Ste. 250 Vancouver, WA 98684 360-256-4400 www.jenkon.com Corporate & Sales Force software for 21st century world-leaders in global direct selling. Cloud-based & on-premise solutions are available.
MW2 DIRECT 2033 Gateway Place, 5th Floor San Jose, CA 95110 408-573-6310 www.mw2consulting.com/direct Combine the Magento Platform with powerful social and direct selling features available in the MW2 Direct platform. Solving Digital Transformation for direct selling with personalization, party management, influencer marketing, commission, analytics.
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SEPTEMBER 2020
NEXIO 727 N 1550 E, 3rd Floor Orem, UT 84097 1-877-551-5504 www.nexiohub.com Nexio manages the chaos of payments offering: • Faster roll out for distributors or partners • Simplifies payment processing for corporations Nexio does this by being integrated with the majority of back-office software solutions in the Direct Sales Industry.
THATCHER TECHNOLOGY GROUP, LLC
55 Shuman Blvd., Ste. 350 Naperville, IL 60563 866-698-3848 www.thatchertech.com
Thatcher Technology Group provides Sales Force, Compensation and Incentive Management Software for the Direct Selling Industry.
XIRECT SOFTWARE SOLUTIONS
686 E 110 S Unit 104 American Fork, UT 84003 385-448-1800 www.xirect.com Scalable software from startup to enterprise. Your delivery expert in Commissions Calc / Consulting, Replicating Websites, E-Commerce, Reporting, Promotions, Localization, Multi-Currency, and more- The Perfect Cloud-based Direct Selling Software Partner!
TOOLS, RECRUITING & TR AINING
INTERNATIONAL DIRECT SELLING TECHNOLOGY CORP.
TA X S E R V I C E S
TO BE INCLUDED IN THE VENDOR DIRECTORY, CALL 1-800-279-5249
S O F T WA R E / T E C H N O L O G Y S O L U T I O N S
S O F T WA R E / T E C H N O L O G Y S O L U T I O N S
Vendor Directory
SOVOS 200 Ballardvale Street, 4th Floor Wilmington, MA 01887 1-800-334-1099 www.sovos.com Save time and money with a smarter tax information reporting solution. Sovos solutions keep up with regulatory changes, perform TIN verifications, and automate your organization’s entire 1099 and 1042-S federal and state reporting process.
SUCCESS PARTNERS 5800 Democracy Drive, Suite 100 Plano, TX 75024 800-752-2030 www.successpartners.com SERVICES THAT SPARK GROWTH. From sampling and physical starter kits to digital marketing, we’ve got you covered. We serve by working alongside you to design, develop, and deliver solutions that benefit you, your distributors, and your customers.
It’s Through One Another that We Find Our Way Forward—
REGISTER FOR THESE EVENTS TODAY OUR #COMMUNITY IS #STRONGERTOGETHER
Tax Seminar Sponsored by
SEPT. 16–18
@HOME DSATaxSeminar.com
SEP. 22–23
@HOME DirectSellingDayOnCapitolHill.org
OCT. 13–15
@HOME DSALegalRegulatorySeminar.com Sponsored by
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Featuring Commissioner Noah J. Phillips of the Federal Trade Commission
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CONVERT
Automate and amplify distributor sales systems & offer your customers an impressive and engaging buying experience!
Turnkey Sampling 30 years of experience to guide you through best practices for a successful sampling program! •
In-app sample ordering and fulfillment
•
Order tracking and drip campaigns
•
Physical and digital distribution systems
•
International distribution in place
•
Value-added services: artwork, sample assembly, sample manufacturing and fulfillment
•
20 years 3PL experience serving the direct selling channel
•
On-time delivery and competitive pricing
“The NOW App and the SUCCESS Partners team have really made everything easy for us.” –John Licari, COO, Total Life Changes
R E Q U E S T A D E M O ! C O N TAC T U S TO D AY
app@successpartners.com / 1.800.752.2030 / successpartners.com
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Hello, Global Payments… Metrics Global has built a unified commerce and payments platform that enables you to sell anywhere and everywhere – availing your global customers a truly localized and seamless buying experience through one simple technical integration. As a Metrics Global partner we will connect you to a scalable and functionality rich revenue generating machine that will fuel your market expansion strategy and exponential growth plans. We provide the advocacy and expertise needed to help you navigate the complexity of global payments. You focus on building your business. Whether you are a well-established, globally recognized brand or a relatively new, fast growing disruptor, the Metrics Global platform is designed to create measurable business value. Let us show you how. Contact us today at info@metricsglobal.com
Acceptance
Optimization
Protection
Growth
Global & Local Cards
Enhanced Approval Rates
PCI-DSS Level 1
173 Countries & 170 Currencies
140+ Alternate Payment Methods Omni-Channel Support
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CardSync™ Universal Account Updater Localized Solutions
Card Vault & Tokenization Global Fraud Protection
Local Processing in 58 Markets Direct Selling Experts
8/18/20 9:25 PM
COMPLETE YOUR MOST IMPORTANT PASSES Looking to tackle bigger markets? As your field grows, your commissions calculation speed, reporting capabilities, and gameplays need to grow with it. Draft FlexCloud to your team to see what an enterprise-level platform can do for you. Contact us today for a free demo. Learn how a better business starts here: http://info.infotraxsys.com/flexcloudwhitepaper
801.431.4900 | infotraxsys.com
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VOLUME 16 ISSUE 9
DIRECT SELLING NEWS
DirectSellingNews.com