Direct Selling News, February 2011
by Barbara Seale
One of direct selling’s great mentors, Jim Rohn, once said, “Formal education will make you a living; self-education will make you a fortune.” He may not have had ViSalus Sciences in mind, but Founder and CEO Ryan Blair says that he and his two co-founders spent the company’s first five years learning what not to do. Now that they have found the formula, they’re celebrating a year of 500 percent revenue growth.
When entrepreneur Blair combined forces with his ViSalus co-founders Blake Mallen and Nick Sarnicola—two men who had built successful direct selling businesses and big downlines as distributors—they had noble intentions to build a health-based business that would benefit business owners and customers over the long term.
“We’re ambitious people, but our goal wasn’t to get rich or build the biggest company in the industry, just to provide value to distributors and customers,” Blair says. “We spent the first five years learning what not to do. Then we spent last year not repeating the same mistakes we made over the first five and doing what works instead. The economic downturn forced us to get focused on what works, and now we’re at an all-time high in every category. By early 2011, we’ll be in the neighborhood of $10 million a month in sales.”
What turned everything around was a long-lasting flash of marketing brilliance called the Body by Vi™ Challenge. The Challenge has been so successful that it has become the company’s foundation.
Shaking Things Up
The simple 90-day program lets participants take advantage of ViSalus health products and support tools to transform their bodies. As a marketing tool, as well as a health-transformation tool, the Challenge has been wildly successful. Since its launch in July 2009, ViSalus estimates to have helped people lose 3 million pounds.
The core ViSalus products are low-calorie, high-nutrition meal replacement shakes. But because of the Challenge, distributors don’t focus on “selling” the products. Instead, they issue a friendly weight-loss challenge. “Let me tell you about these great weight-loss shakes” has transformed into “I’m working on losing 20 pounds in the next 90 days. Anybody want to join me?” The difference is profound.
“The Body by Vi Challenge is the business. It’s the only thing we talk about,” Founder and Chief Marketing Officer Blake Mallen says. “It’s a simple conversational message that draws lots of responses. There’s nothing to sell or explain.”
ViSalus crafts products from high-quality ingredients that taste good. Then they develop packaging to conform to Challenge-participants’ goals. For example, the basic “Balance Kit” is targeted to people who simply want better nutrition. It contains 30 servings of the Vi-Shape™ Nutritional Shake Mix for once-a-day balanced nutrition. The kit includes an assortment of Health Flavors, which add flavor variety and even more health benefits to the shake. The Shape Kit includes 60 servings of shake mix, enough for 60 slimming meals—two a day that result in weight loss. The Transformation Kit includes the 60 meals, plus additional products to help people transform their bodies as quickly as possible. The Core Kit helps support the active lifestyle with one shake a day, healthy energy and nutritional supplements. All of the kits come with recipes, meal plans, exercise plans and more.
“If you’ve ever had other protein drinks, you know they can be a little gritty and have a bitter, metallic aftertaste,” says Senior Vice President of Marketing and Brand Development Audrey Sommerfeld. “Ours tastes really good—sort of like cake mix. We know that if you enjoy it, you’ll stick with it. When mixed as directed, in the shake you get 22 to 25 grams of high-quality protein and a full serving of fiber that keeps your blood sugar level and makes you feel full. Those are the amounts of nutrients nutritionists recommend most. We recommend blending the shake mix with fruit. That makes a 200 to 220 calorie meal that saves you money and is much better for you than most American breakfasts. Use two shakes a day to melt the pounds away.”
The basic light sweet cream flavor that Sommerfeld describes as “like cake mix” is a foundation. It can be enjoyed alone or with added Health Flavors, such as chocolate, cappuccino, banana, orange or peach. Each offers specific health benefits as well as flavor variety. Craving something crunchy? ViSalus also has Nutra-Cookies made with their exclusive Tri-Sorb™ protein system, prebiotics, fiber and antioxidants to support a healthy immune system, healthy digestive system, and help curb appetite. More products are in the works for 2011. Mallen hints that new products will support energy and fitness.
The products and the Body by Vi Challenge keep the business opportunity simple, and the Three for Free promotion lets distributors get their products at no cost.
“The whole message is super simple: Lose weight, get fit and save money because you’re replacing meals with our shakes, literally saving people a couple hundred dollars a month,” Mallen says. “Then we layered in Three for Free, which removed all financial objections and barriers. We let our customers and our distributors refer three other people. Then their own products are sent to them free. We’re averaging over $400 in monthly product revenue for every distributor in our company. That’s unheard of! And our retention is dramatically better than the industry average.”
Retention results from several factors, including a strong compensation plan that lets new distributors promote quickly. Go-getters who promote to director status during their first month with ViSalus are referred to as “Rising Stars.” The title means income—and more of it for the rest of their lives. A new distributor qualifies when he or she sponsors three other distributors, each having three customers using one of the company’s weight-loss kits each month. That makes the promoter eligible for the ViSalus Weekly Enroller’s Pool, which is paid every week. Those distributors are also eligible to receive their product for free. Duplicating that pattern—which ViSalus calls the Power of 3—through eight levels of referral can help the distributor earn more than $72,000 a month.
“We pay out up to 80 percent payout at the highest levels,” Blair says, “and we have a car bonus at the lowest rank of any competitor we’ve looked at.” More than 1,500 distributors have already qualified for a BMW, making them members of the company’s fancifully named Bimmer Club.
But the comp plan is intentionally skewed toward the bottom and middle ranks of producers, helping them quickly earn income that makes a real difference in a family’s budget.
ViSalus distributors’ average is similar to many other companies, but they have a broader range of young, middle-aged and older persons. The top 10 distributors today tend to be slightly younger than the industry average, possibly attracted by the company’s 30-ish founders, but the age of those high achievers ranges from 31 to 75, Mallen says.
“What’s dramatically different is our image and energy,” he says. “In my opinion, young is no longer an age. It’s more of an energy. Everyone wants to feel young, be young, be around a young, vibrant culture. That’s why we attract people of all ages—we attract a young energy. That’s duplicated throughout our leadership and our whole culture.”
The youthful approach embraces the use of technology. In December, ViSalus launched a powerful new generation of Vi-Net™, the private website that its distributors use. Mallen describes it as “like a private Facebook. It will have a front-end marketing site system, the normal back-office genealogy, real-time commissioning and cool stuff for managing your business. But then it layers in an online community, literally like Facebook. People will be able to see everyone’s challenges and fitness goals. There’s a live community feed. It wraps an entire online community around the Challenge. It’s really big when you see that kind of support.”
The new ViNet is fully integrated with Facebook, Twitter and MySpace. Its energetic executives and distributors use it as a standard way of doing business.
Mallen himself sets the standard for activity on social networking sites. He posts videos on Facebook a couple of times a week with content that distributors can share with their personal networks. He often gets about 1,300 views in 24 hours. Technology also supports business presentations, and pre-recorded conference calls are available daily that support distributors’ businesses.
The future is exciting for ViSalus. Mallen says that the eventual revenue goal is $1 billion a year, a figure he believes is attainable within a few years. The ViSalus product portfolio is built years in advance, and the company plans to introduce new products that complement its existing line in 2011. International expansion is also on the horizon, beginning with Canada. And they plan to amp up their consumer-to-consumer business. But through it all, they’ll continue to try not to mess up the formula they’ve refined. It works.
“Our goals are really the same as when we started,” Blair says. “We want to add more value to customers and distributors; we want to get better and make the experience of our customers better. But basically, our ambitions are to continue to help the world lose millions of pounds.”
Starting any new company takes a lot of money. In addition to the resources of ViSalus Sciences’ founders, the company also had silent backing from entrepreneurial icon and self-made millionaire Robert B. Goergen Sr., the namesake of the Goergen Entrepreneurial Management Program at the Wharton School at the University of Pennsylvania. Ryan Blair, ViSalus Founder and CEO, has counted Goergen as one of his best friends ever since Goergen invested in Blair’s first business.
ViSalus proved its worth, and Goergen’s holding company, Blyth Inc., began to openly invest in it. A company that specializes in growing entrepreneurs, Blyth gives six-year-old ViSalus the stability of a company with a much longer history. ViSalus has become one of the strongest performers in Blyth’s family of companies.
“Because they’re part of the team, we learned a lot about successfully scaling, growing and running a business,” Blair says. “It’s been very helpful having them as our partners. It lets founders and management team focus on our core strengths, while we benefit from their depth of expertise in areas such as international growth. We’ve been able to piggyback on a lot of their contracts, which gives us a very efficient business model. Leveraging the Blyth knowledge and infrastructure lets us deliver the highest value possible for our customers and distributors.”
Goergen and his two sons, Robert Jr. and Todd, all sit on the ViSalus board of directors.
ViSalus Founder and CEO Ryan Blair grew up with a challenging lifestyle, so, better than most, he understood the value of a helping hand.
He asked ViSalus leaders to come up with a way for the company to help people in need. The result: The Body by Vi™ Community Challenge, which lets anyone donate meals to children and families who don’t have the means to get the nutrition they need each day.
Senior Vice President of Marketing and Brand Development Audrey Sommerfeld says, “Ryan had been hungry and poor, so he wanted us, as part of our Life, Health and Prosperity mission, to corporately give back. Hunger in America is a challenge. One of five Americans worries about food. We talked with food banks and learned that their No. 1 need is protein. They get starches and canned food, but proteins tend to be peanut butter and tuna. And often when many low-income children go home, there’s no adult at home. Food banks wanted something that children could make for themselves.”
Enter the tasty protein shakes created by ViSalus. Children can make them without supervision, providing them with healthy calories and protein. Food banks loved it.
Through the Body by Vi Community Challenge, anyone can donate 30 meals to children in need for just $24, and ViSalus will match them with an additional 30 meals. The program has provided 497,000 meals in the last year—halfway to the company’s initial goal of a million meals donated. Donations come from the company’s e-commerce site and through distributor events. Attendees often hear food bank representatives explain how the program is helping their clients.
“At a training program in Denver, teenagers onstage told us that they know they’re getting food that’s good for them,” Sommerfeld says. “We raised 20,000 shakes because of that. It’s a very powerful tool for feeding people who are hungry. It’s a way that, by creating prosperity for our distributors, we can make a difference in the lives of people in need.”