DIRECT SELLING
Q: You have had distinguished careers in both the public and private sectors. What attracted you to Herbalife Nutrition and the direct selling channel?
A: When I joined Herbalife Nutrition five years ago as Chief Health and Nutrition Officer, I was impressed by our distributors and their dedication and purpose-driven approach. Since then, I have developed a true appreciation for their entrepreneurial spirit, commitment to community, and ability to adapt to change.
The direct selling business model is the most personal form of selling and, arguably, the most appropriate for the health and wellness industry due to the personal nature of helping a person achieve their healthy lifestyle goals. Our customers purchase Herbalife Nutrition products for two reasons: 1) Our products are quality driven and backed by science and 2) our distributors deliver results through education and a supportive community.
The competitive advantage of our business model is our distributors. They deliver what our customers are seeking: results. Our distributors apply their expertise down to the individual. It’s an amazing sales channel with amazing people!
Q: You are just ten months into your role as CEO—and a lot has happened in our country during that time. What is it like to lead a global enterprise in a period of uncertainty?
A: I assumed my role as CEO of a company that operates in ninety-four countries right when the pandemic was starting to take hold of the world. I feel extremely fortunate to be surrounded by a strong executive team that has worked together for many years. I also feel fortunate to work for a company that is in the business of healthy nutrition worldwide. There’s never been a greater understanding of the importance of living a healthy, balanced lifestyle, eating well, and exercising. In addition, there has never been a time when more people are interested in pursuing an entrepreneurial opportunity.
Unwilling to let challenges stand in our way, we’ve met each hurdle with an entrepreneurial spirit. Our distributors found ways to adjust their business methods and prosper in a virtual environment, while complying with federal and state guidance in order to protect themselves and their customers.
Q: Earlier this year, you said about the channel: “Together, we are stronger.” Can you elaborate on that?
A: The direct selling business model brings people together. It’s as simple as that. It’s as personalized as you can get—people helping other people. We can sell anywhere to anybody. As an industry, we need to continue to educate different constituencies about our business model.
Our future success as a sales channel is hinged on the reputation of the industry. We are at a crossroads in the history of this industry and our reputation should be our priority. I know several of my peers agree with me on this.
Let’s educate everyone on who we are, how the model works, and our positive impact on individuals and, more broadly, on society. As leaders we must model and champion transparency and ethics in business.
THE EFFECTS OF 2020
Q: What is the most important lesson you learned in 2020?
A: It was my responsibility to guide and lead the team through our first-ever global societal lockdown. Because our nutrition products are consumed daily by people around the world, protecting our supply chain, manufacturing, and our distributors’ businesses while also keeping our employees safe was truly a balancing act. We had to find a sweet spot.
What I learned is the power and importance of regular, clear, and transparent communication with all our stakeholders. I also experienced firsthand the importance of a collaborative culture and being able to trust and rely on the judgment of your executive team and those field staff and our independent distributors who are closest to the customer. Communication, collaboration, and confidence in the team has been the key to navigating these challenging times.
CONSUMER PROTECTION AND DSSRC
Q: What do you see as the most significant role of the Direct Selling Self-Regulatory Council (DSSRC)? What can we do together as an industry to better protect consumers while empowering our distributors?
A: As an industry, let’s ask ourselves: “What more can we do to better assure the public and regulators around the world that no one cares more about our distributors and their customers than we do?”
The most important role of the DSSRC is its provision of clear guidance for the direct selling industry about practices that protect consumers—not just for members of the Direct Selling Association but all direct selling companies. It is incumbent upon every direct selling company to protect its customers. The DSSRC provides a necessary layer for consumer protection to work with regulators to ensure that those who are attracted to our products and business opportunity are protected in a transparent manner. The DSSRC’s scope includes all direct selling companies. This widespread industry participation will benefit all consumers and the industry as a whole.
As a steward of good practices, we can encourage companies to develop and implement a robust compliance program, which is an important feature of protecting consumers, while empowering distributors with clear guidance on the regulatory rules of the road.
LOOKING AHEAD
Q: How has Herbalife Nutrition used technology to become more customer-centric?
A: The last five years at Herbalife Nutrition have been some of the most innovative years in our history. Today, we know more about our supply chain, our distributors, and their customers than ever before. We believe the future for the direct selling industry is transparency and innovation. Using these concepts, direct selling companies will better understand customer behavior and purchasing habits.
We utilize technology that helps our distributors better understand their customers’ purchasing habits and forecast their needs, leading to a better customer experience. The technology also helps the distributor be more efficient with their time.
Simply put, understanding our customers through our distributors is our priority. We want to give our distributors the tools to do so as well.
Q: Despite the challenges of 2020, many direct selling companies have performed extremely well. What does this say about the power of the direct selling model?
A: Our success in 2020 is based on three things: our distributors, our employees, and our products.
We recently announced our financial results for the third quarter with year-over-year net sales growth of 22.3 percent and ten straight quarters of volume growth with an average quarterly growth of 23 percent over the same previous year time period. That performance can be attributed to the business model, our amazing employees, and the entrepreneurial nature of distributors—who are the salesforce—and their ability to adapt their approach at a very localized level to add customer value.
Our distributors are the most entrepreneurial people in the world. It was fascinating to watch our distributors adapt to the chaos created by the pandemic, and to see our employees pivot their focus to support our distributors in new ways. Small independent business owners have the ability to adopt new approaches and our independent business owners adapted in days.
Even before the pandemic, there was a growing demand and focus on nutrition and a demand to have the opportunity for a home-based business. People today are paying more attention to their health and well-being than in the past. As a result, our customer base continues to grow.
Q: What can be done to dispel misconceptions about direct selling held by the public and regulators?
A: The narrative about the industry is currently being determined by critics who have limited understanding of what we do and the impact we have. Unfortunately, we are on the defensive as an industry and that posture puts us at a decided disadvantage.
Let’s become more proactive in identifying constructive ways to engage our critics. Let’s listen and have open dialogue with those who are skeptical of our model. If we desire a vibrant, growing industry that is respected, admired, and embraced by all, then, as an industry, we must first self-reflect and be willing to listen to all the voices out there so that we may better represent who we are and what we do.
As an industry, let’s work with our independent distributor leaders to consistently look for new ways to nurture and protect consumers. Perpetual improvement is a hallmark of excellence in business. Let’s educate everyone on who we are, how the model works, and our positive impact on individuals and, more broadly, on society. As leaders we must model and champion transparency and ethics in business.
I believe the future is bright. I am confident that our industry will continue to evolve, learn, and grow with time.