DSA AnnualMeeting 2018 and Beyond

DSA ANNUAL MEETING 2018 &

BEYOND Weathering the Tides of Change, and Charting Our Future of Competition and Innovation

Dear Direct Selling Colleague, Thank you for being part of the DSA Annual Meeting.

Ours is an age marked by transition. As direct selling faces these tides of change, the fight to protect our independent sales forces and their ability to build business on their own terms remains our linchpin issue.

We have taken note of the cultural movement all Americans experience today—as a country, a marketplace, an industry and an Association. In doing so, it has become clear that we now face a time not merely for evolution, but revolution.

In the face of our changing times, CEOs from across direct selling came forward to share how their companies’ innovations continue to blossom. Workshops provided attendees with the insights needed to develop their sales forces, communicate in new ways and make the most of emerging technology trends.

An overview of DSA’s 2018 Growth & Outlook Survey revealed how today’s rapidly evolving retail sector is as strong, if not stronger, than ever before, and attendees learned how today’s retail market climate and labor market pose favorable macroeconomic conditions in which direct selling can thrive.

Importantly, DSA also outlined a bold new program designed to improve the reputation of direct selling companies, our independent contractors and the direct selling channel. Modeled after self-regulation programs in other industries as cited by the Federal Trade Commission (FTC), this program will rely upon third-party administration, a comprehensive affirmative review of business practices and industry-wide support. Sufficient resources will ensure the successful launch and ongoing sustainability of the program.

Thank you for being part of this movement and for your contributions to DSA and the business. I look forward to working with each of you toward our prosperous future.

Sincerely, JOSEPH N. MARIANO President, Direct Selling Association

“In 2017, some 18.6 million people were involved in direct selling in some capacity. Of that number, 5.5 million described themselves as full- or part-time business builders.

Yes, times they are a-changing, but one thing is clear: smart entrepreneurs and businesspeople are embracing our direct selling model as the go-to pathway for success.”

—JOSEPH N. MARIANO

“What forged my impression of direct selling was the positive impact direct selling has on communities, and your industry reflects a spirit of accountability in the bold self-regulation initiative you pursue today. Sharing the responsibility to holding others accountable is admirable, and an industry that regulates itself gives its businesses significant credibility. I believe others can learn from what you are doing today.”

—­REPRESENTATIVE JOHN MOOLENAAR United States Congressman, Michigan 4th District

“The backbone of what makes our country great is entrepreneurship . . . the golden goose of our nation is business and capitalism; government can help ensure that the companies that create opportunities such as those in direct selling are able to continue doing so, helping ensure that even more Americans can take part in what you create.”

—­­REPRESENTATIVE TONY CARDENAS United States Congressman, California 29th District

“Direct selling offers people the opportunity to engage in a noble profession, and as companies, we inspire, empower, educate and encourage people so that they can achieve their full human potential. But today, we need to do more than just encourage people to dream: we can provide the latest tools—automation and technology—to help people make that dream come true.”

—ROGER BARNETT Chairman and Chief Executive Officer, Shaklee Corporation

“Your character and your values are most revealed during times of challenge. Our values are: always doing what’s right, working together and building things better.

I’m proud that our values and culture did not change during the last five years. What we learned, we’re here to share with everybody. Learn from us. Take advantage of our journey.”

—­RICHARD GOUDIS Chief Executive Officer, Herbalife Nutrition

“Direct selling offers the ability to transform yourself, transform teams and to build something that’s more sustainable over time. Transformation is a process that starts with mind-set: it starts with how we actually think and then how we convert thought into action. By embracing this principle, we can each achieve a growth mind-set. This is how we can each become an everlearning organization.”

—­RYAN NAPIERSKI President, Nu Skin Enterprises

“Everyone wants to believe that business starts and catapults ahead bringing only success. It doesn’t happen that way. It’s the hustle of entrepreneurship. Being an entrepreneur is also about what my dad taught me: seeing what no one else sees. And as direct sellers, it is that entrepreneurial vision that we get to give other people every day.”

—­BRITNEY VICKERY Chief Executive Officer and Founder, Initials, Inc.

“Anytime someone in my company says, ‘We need to improve our training,’ ‘We need to be able to teach our people more,’— I believe that what they’re really citing is a simplicity challenge. Build a customer engagement process that simply encourages people to get the results they want, and they’ll become natural evangelists. This is what will fuel your company when challenges come.”

—­BRETT BLAKE Chief Executive Officer, AdvoCare International, LP

“Continuous growth or business success does not have to be a game of chance. Knowing the source of your sales will help you detect trends revealing bad business practices or other factors that might contribute to longterm growth and sustainability. If you learn and change when times are good, you can better overcome the challenges that will arise.”

—­­CONNIE TANG President and Chief Executive Officer, Princess House, Inc.

EVOLVING RETAIL MARKETPLACE POSES OPPORTUNITIES FOR DIRECT SELLING

“Direct selling’s greatest advantages over

The one constant in the fast-evolving retail landscape is change.

This was especially evident when DSA’s Research Committee presented highlights from DSA’s 2018 Growth & Outlook Survey.

contractors who have personal, trusted

While U.S. retail sales grew 4.7 percent and GDP grew 4.1 percent between 2016 and 2017, the U.S. direct sales market decreased 1.8 percent to $34.9 billion.

Direct selling executives reflected optimism, noting how favorable macroeconomic conditions in the retail and labor sectors pose opportunities for direct selling to return to growth by playing to its key strengths and differentiators and quickly learning from innovative retail leaders outside of direct selling.

traditional retail are the independent relationships with customers that are rare in traditional or online retail. The evolution of how consumers shop plays to direct selling’s strengths, and our industry has much to gain if we empower direct sellers to understand their customers’ needs and facilitate the delivery of value-add product solutions.”

—JEFFREY KAUFMAN Director of Customer and Field Insights at Isagenix International and Chair of DSA’s Industry Research Committee

RIDING THE ENTREPRENEURSHIP WAVE: CAPITALIZING ON YOUNGER GENERATIONS’ DESIRES Would Consider Flexible Income Opportunity SPECIFIC GROWTH STRATEGIES EXPLORED AT ANNUAL MEETING INCLUDE:

63%

50%

33%

Millennials

Gen Xers

Baby Boomers

Very or Somewhat Likely to Start Own Business in the Next 12 Months

45%

31%

19%

Millennials

Gen Xers

Baby Boomers

Source: DSA’s 2017 Direct Selling Consumer Attitudes Survey

• GROWING RETAIL SALES BY: Becoming more customer-centric Launching a preferred customer program to better meet customers’ needs Reaching customers in multiple ways though an omnichannel approach Capitalizing on e-commerce opportunities Leveraging social selling Learning to compete in shipping: bring delivery cost and time down Forming strategic partnerships • ATTRACTING AND RETAINING SALES FORCE BY: Capitalizing on America’s desire—especially the desires of Millennials and Gen Xers—for additional, flexible sources of income Modernizing payment frequency and means of payment Better competing with collaborative economy companies for sales force members, and ensuring recruitment messaging shows off the unique benefits of direct selling in a compelling way: -- Low-cost, low-risk way to start a business -- Training and start-up kits -- Coaching from upline/sponsor, recognition -- Personal touch: experience of providing product/service to customers -- Expertise of a direct selling company providing support for the representative’s business

“Your competitors are lazier than you think: everyone wants to be better and faster, but they’re not willing to put in the work. Be insatiable, push harder, act sooner, never give up. But also remember that it’s not just hard work, it’s about noticing the opportunity that is easily overlooked.

To be better and faster, you need to be curious, insatiable and willing to destroy.”

—­JEREMY GUTSCHE Chief Executive Officer, TrendHunter.com, and New York Times Best-Selling Author of Better and Faster

“We have to ask what’s working well and what’s not. And that allows this continuous improvement cycle because what made us successful 20 years ago is not what’s going to make us successful 20 years from now. We have to continuously reinvent this process. Exceptional service is achievable for every organization because exceptional service is architected from systems and processes that you control.”

—­­­STU LEVINE Training Manager, Disney Institute

DSA ANNUAL MEETING 2018 LEADERSHIP PANEL Weathering the Tides of Change through Education, Learning and Building Greater Trust

DSA Annual Meeting 2018 Leadership Panel looked beyond the ethics and self-regulation initiative that is being designed in partnership with the Council of Better Business Bureaus (CBBB) to explore issues of innovation, competition and growth, as well as discussing how direct selling is seizing emerging opportunity and moving the industry into the future.

“The marketplace is changing but so are we,” noted Traci Lynn Burton, Traci Lynn Inc. Founder and CEO and Chair of DSA Annual Meeting 2018. “We have so much to share with one another and so much of

what makes us successful is how we learn from one another. I believe in our future as an industry because I believe in all of you.”

“We are adapting to a changing marketplace and a digital world, but it is still our people who make our industry so special,” added John Parker, Chief Sales Officer for Amway and DSA Chairman. “If we’re able to deliver opportunity and experiences and really leverage the community dynamic in our businesses, I think our future is much brighter than our past has been.”

All agreed that as direct selling faces today’s changing times, it is the direct selling’s collective experience—coupled with efforts that build greater trust within the market—that will continue to be the source of inspiration that gives the industry the strength needed to chart the industry’s course forward.

“DSA has set a very high standard for consumer protection, for our customers, our distributors and our commitment to be not only the highest standard of ethics but the best practices in the entire American economy.”

—ADOLFO FRANCO Executive Vice President and Chief Operating Officer, Direct Selling Association

“The vision and passion we create spans across all ages, races and backgrounds.

We’re all on the same page as an industry for our mission to police, protect and be the best we can be.

That’s what draws us together.”

—ANGELA CHRYSLER President and Chief Executive Officer, Team National

“We have to make sure we are very clear about getting the message of direct selling out so that it’s a unified, clear message. What we have to continue to do right is what we have been doing for over 100 years, but make sure that our message resonates, that it’s clear and concise and we get out there first.”

—TRACI LYNN BURTON Founder and Chief Executive Officer, Traci Lynn, Inc.

“Taking a bold step and partnering with the Council of Better Business Bureaus is the beginning of a journey for direct selling as we set a new tone in the marketplace. We are serious about consumer protection and selfregulating our industry, and we are doing it in a way the helps others recognize how great this industry is.”

—JOHN PARKER Chief Sales Officer, Amway and Chairman, Direct Selling Association

“Direct selling is just another business model.

There are good companies and there are bad companies like there are in every industry. What we are doing today as an industry is recognizing what parts make a good company, and identifying those parts that do not align with where we want to go. More than ever, the difference is clear.”

—DAVE WENTZ Chairman, Direct Selling Education Foundation

DSA ANNUAL MEETING 2018 WORKSHOP SPOTLIGHT:

Unlocking the Power of Storytelling (Sales Force Development Track) DSA Annual Meeting 2018’s exciting educational content provided participants with insights to be deployed in their professional lives to overcome the real-world challenges they face.

Among San Diego’s most compelling workshops was the sales force development track’s “Unlocking the Power of Story” workshop.

Led by strategic storytelling expert Andy Henriquez, participants learned what is needed to create a “culture of storytelling” within an organization, and how such a culture needs to start from an organization’s leadership and permeate to the newest distributor.

Henriquez led participants through the process for not only crafting their signature stories, but also shaping their message. The workshop provided new ideas for how to use storytelling to advocate on behalf of their direct selling organizations, and also promote products and brands.

Participants learned how to: • Engage audiences from beginning to end by creating a story timeline that builds a message.

• Eliminate the worry of losing sight of a story’s most salient points by following a proven story structure to ensure a consistent position and message.

• Incorporate personal feelings and emotions into a message in ways that inspire audiences, move them to action, and leave them with a lasting impression and a demand for more.

“Pinpoint what makes your signature story special, and deliver this message with clarity. This is how you create your brand in ways that captivate your audience and convinces them that they need to become one of your tribe . . . ” —ANDY HENRIQUEZ Strategic Storytelling Expert, ShowUpForYourLife.com

HALL OF FAME JEFF REIGLE, PRESIDENT AND CEO OF REGAL WARE, INC. “The integrity, dedication and performance Jeff has demonstrated in running his company are the same attributes that he has brought to his many years of leadership in the Direct Selling Association,” explained Joseph N. Mariano, President of DSA. “We are proud to welcome him into the ranks of direct selling’s most extraordinary leaders.”

DSEF CIRCLE OF HONOR DAVE WENTZ, OUTGOING DSEF CHAIRMAN “We are excited to add Dave to DSEF’s Circle of Honor to celebrate his long history of supporting and contributing to the work and success of the Foundation,” said Gary Huggins, DSEF Executive Director. “Dave has also been a driving force in developing and implementing a bold new vision for the Foundation to mainstream direct selling by partnering with academics to produce industryvalidating research and reach tens of thousands of students every year with educational content on the channel.”

DSEF EDUCATOR OF THE YEAR DR. ELIZABETH DAVIS, DEAN OF THE SCHOOL OF MANAGEMENT, UNIVERSITY OF SAN FRANCISCO AND DSEF ACADEMIC FELLOW “Dean Davis has made tremendous contributions to DSEF’s work to partner with university professors throughout the country to achieve our goal of reaching more than 60,000 students per year through DSEF events, curriculum and content,” Huggins continued.

“She has been a highly valued strategic advisor to the Foundation through her service on the Board as well as a founding member of the Foundation’s Academic Advisory Council.”

The DSA Awards celebrate the outstanding programs our member companies have implemented, and we have no shortage of greatness to showcase.

The seven award categories are: • Technology Innovation • Product Innovation • Excellence in Sales Force Development • Marketing & Sales Campaigns • Vision for Tomorrow • Partnership Award • Rising Star

PRODUCT INNOVATION AWARD MARY KAY INC. – TIMEWISE VITAMIN C ACTIVATING SQUARES Mary Kay introduced a beauty-industry first that revolutionized the way pure vitamin C is delivered to skin. Pure C can degrade and lose its power over time when exposed to light, air or water. This breakthrough in technology solved that problem by keeping the potency of pure C protected until you unlock its power with every use. As the square dissolves in the palm of your hand, it’s transformed into a fresh, potent, pure vitamin C elixir that can supercharge any Mary Kay® serum. However, it’s not only how the squares work that’s impressive—it’s the results! During a clinical study, visible benefits were seen after using this product just three times a week for two weeks. Skin looked more even-toned and more radiant, and fine lines and wrinkles looked improved. And the benefits got even better with continued use. Leading industry publications have featured articles highlighting the innovative technology, and consumers are giving the product rave reviews online.

PARTNERSHIP AWARD BYDESIGN TECHNOLOGIES, INC. Since its founding in 2000, ByDesign Technologies has been recognized as an industry thought-leader pushing direct selling technology forward with solutions such as the Freedom Platform, which simplifies the complexities behind direct sales, party plan and MLM business models. With more than $6 billion in orders processed and over $2 billion in commissions paid, ByDesign delivers proven results globally.

VISION FOR TOMORROW AWARD USANA HEALTH SCIENCES, INC. - TRUE HEALTH FOUNDATION In March 2012, USANA Health Sciences launched the USANA True Health Foundation (THF), a non-profit organization that provides the most critical human necessities—nutrition, clothing, shelter, medical assistance and health education—to those who are suffering or in need around the globe. During its first year, the Foundation raised more than $5 million in monetary and Usanimals™ children’s supplement donations, with $1.9 million in monies and vitamins donated to those in need throughout the year. USANA believes in loving life and living it and that being part of a healthy family is essential.

Connecting our worldwide family of Associates and customers to worthwhile projects focused on nutrition, disease prevention and better health is at the core of our global activities. The mission of the True Health Foundation is to provide food and nutrition to impoverished children and families, ensuring they can reach their fullest potential.

EXCELLENCE IN SALES FORCE DEVELOPMENT AWARD DAMSEL IN DEFENSE – JOURNEY TO PROTÉGÉ Damsel data shows that only 20 percent of new partners that join but never promote remain active, while an incredible 94 percent of new partners that join and promote to Protégé or above stay active long term. We recognized a retention problem—we were losing 80 percent of new recruits and we did not have a plan to fix the revolving “Damsel door.” We identified that our core rank started with Protégé, and the faster new partners achieved this rank, the more likely they were to stay. Through this discovery, we recognized that we needed a duplicatable system—a process—to glue our key programs together and to create a cohesive journey for new partners to achieve Protégé. The concept of “immersion = retention” brought to life the Journey to Protégé program to help develop our sales force.

MARKETING AND SALES CAMPAIGNS AWARD SCENTSY, INC. - ¡LA HABANA! We curated ¡La Habana!, a limited-edition fragrance collection, to delight and engage Scentsy Consultants, customers and fans. We wanted to give Consultants something new and exciting to share with customers and increase sales during traditionally slower months. We also set out to engage an entirely new Scentsy customer with a sensory exploration of a fascinating locale—an exotic escape from life’s daily routine. We developed a holistic social media campaign to position Scentsy as an industry leader in home fragrance with a unique, trendsetting collection, and to provide Consultants with compelling new products paired with top-notch marketing efforts and training to increase their sales in May and June. We knew Consultants and their customers would be enchanted by ¡La Habana!, but we were blown away by the excitement and adoration surrounding the collection throughout the campaign. Our results far exceeded our goals, with more than 3 million reached and over 150,000 engagements, with 7,000 new Facebook followers generated.

TECHNOLOGY INNOVATION AWARD AMWAY - PRODUCT REGISTRATION In 2017, Amway introduced an improved product registration experience to support the premium, high-performance water treatment and air treatment products that we have been selling for over 30 years. This new experience was designed to engage customers, begin a relationship with them at the point of sale and enable new business support tools for our Amway Business Owners (ABOs). Amway’s new product registration experience is digitally focused, easily accessible, experiential and available to end users through multiple channels. The first iteration released to market includes a unique photo registration process, allowing users to simply open the product, snap a photo of the registration label and send it to Amway via SMS or select social channels. Initial response to this new effort has been very positive, with a significant increase in product registration take rates— from 3 percent to approximately 30 percent. We can now more effectively manage an improved After Sales Service experience over the course of the product’s life. This includes a focus on ongoing filter and cartridge sales, new marketing campaigns for ABOs and end users, warranty management and better financial accountability across our Durables Business.

RISING STAR AWARD PAWTREE pawTree’s revolutionary approach to pet health is to educate and empower pet parents so that they can make informed decisions about their pet’s health with confidence. A pawTree business is the opportunity that changes everything for the company’s petPros: it opens up the “pawsibilities” to do more, see more, accomplish more and dream more! The company’s goal is to help its petPros discover life-changing love and happiness in their own lives, and help others do the same.

THANKS FOR SHIPPING YOURSELF TO THE SHOW We hope we got to see you at our booth. If not, we’re still ready to optimize your supply chain, and start saving money.

WASHINGTON, DC | NOVEMBER 12–14, 2018 Join hundreds of sales trainers, tech gurus, legal eagles and marketing professionals at the DSA Fall Conference, a twoday event where you will explore strategies that will make a difference in sales growth, customer loyalty, consumer confidence and how your business competes.

We’ll explore solutions for what keeps you up at night, trends impacting direct selling and management strategies that work in a world where even the newest ideas risk obsolescence before they ever reach the market.

Explore new ways to raise the bar for all of direct selling by taking a deep dive into compliance, retention, ethics, leadership and much more.

Join us for case studies that celebrate our successes, and also offer realistic solutions to the issues and challenges that you face every day!

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