Read the transcript:

Ben Dixon:

Well, ladies and gentlemen, welcome to the June edition of the Direct Selling executives forum. This month, we have three incredible guests from literally, across the globe that are participating in the discussion of a product-first strategy. Now, before I get into intros and some of the first questions, I want to go ahead, and just pause, and take a moment and talk about where this product-first strategy conversation comes from.

Ben Dixon:

And I’ll actually stop sharing the screen, we’ll bring up all our faces, it’s easier to see in a panel in a round table. Tony Solis was actually on the line. I want to Tony’s intro in just a moment. And I actually had a conversation years ago back when Tony was running Pampered Chef at the longevity that I had seen as a vendor in space. And he had seen an exec role of companies that lead with the product first versus the opportunity first in their companies.

Ben Dixon:

What do we mean by that? Well, there are companies in our space, and direct sales, and network marketing, where if you downloaded the database, looked at who’s purchasing, you would see 90 plus percent of the purchases only coming from the active distributors, self-consumption. And you would say, “Wow, like Ben Horowitz.” Culture isn’t what you say, it’s what you do, amen.

Ben Dixon:

So, if culture isn’t what you say, it’s what you do, and all the consumptions only coming from your sales people. Are you really serving any regular customers? And the truth is, we’ve seen massive brands grow long term and continue to steadily grow day-after-day, year-after-year, hit their numbers, because they have a strong, plain old customer base.

Ben Dixon:

And it’s seen by what they do, because they have training programs that lead people to go get plain retail customers. They have promos in place that make that a reality. And some of the people that are here on the line today have been doing that for years. And they’re here to share that with you. So, if you’re watching, and you’re running a company right now, and you look at it, and you say wow, we’re really just a self-consumption company.

Ben Dixon:

We are struggling with that. We don’t really get a lot of plain customers. You’re going to hear from people who have done turnarounds in that world and converted those companies to being more product focused. And you’re going to hear for people who have started leading that way from the beginning and are enjoying the benefits of that.

Ben Dixon:

So, with that, let’s go ahead and jump into intros today. First up on the call, we have Alex, CEO of Sanki. Alejandro started off as a chemical engineer from UNAM with an executive education in business entrepreneurship and risk capital from the Autonomous Technical Institute of Mexico. He was distinguished with several academic awards, such as the Gabino Barreda Medal and recognized nationally.

Ben Dixon:

He was also distinguished in 2009 by Revista Expansion as the Entrepreneur of the Year, He was also speaker of Expo Management 2011. Has been interviewed on different TV and radio programs nationwide with 16 years of experience in marketing, strategic planning, development and launching businesses. And today, Alex serves as CEO of Sanki. Alex, thank you so much for joining us here today.

Alejandro Lopez:

Thank you, Ben. Thank you for the invitation. It’s exciting to be here. Thank you.

Ben Dixon:

It’s going to be a fun discussion. And then, next up, we have Al. Al has got a special place in my heart because my roommate in college was one of Al’s distributors. So, Al runs the famous Cutco company. I’ll give you a little bit of bio on Al. Albert DiLeonardo started selling Cutco in the summer of 1977. Man, talk about an amazing time in American history, holy cow. When he was a student at Temple University, was trained by [Dan Fraida 00:03:35], the founder of [ACDA 00:03:36].

Ben Dixon:

After graduating from Tampa with an accounting degree, Al decided to stay with Vector as a career, opened a district office, and played a pivotal role in developing many of the managers who helped build Vector out. He set Vector sales records at each level, and continue to earn promotions. And today, Al serves as CEO of Cutco Vector. So, Al, thank you so much for joining us here on the call today.

Al DiLeonardo:

Great to be here.

Ben Dixon:

I love your story, Al, starting in the field, and then being on the corporate side. My own story was starting in the field with my sister and then moving to the vendor side. I love the relevance that’s going to bring to the conversation. And then, lastly team, we have Tony Solis. He’s, today, is Vice President of Sales and Marketing at Avere.

Ben Dixon:

But in the past when I met Tony, he was actually running things over at Pampered Chef and then Genesis PURE, which today is PURE in the space. So, I’ve seen Tony move through this exact conversation in the series of companies, just good to hear. And after 20 plus years, with learning from some of the best and direct sales, Tony is a unique opportunity to take everything he’s learned, built something special in the wellness category.

Ben Dixon:

Overseeing and facilitating everything from consumer and distributor experienced, and excited to be a part of pivotal movement in our industry, again, today truly is. So, Tony, thank you so much for being here today.

Tony Solis:

Thank you.

Ben Dixon:

All right. Well, gang. Let’s go ahead and just jump right into our first question. We’ll start with Tony, and then we’ll go to Al, and Alex. We’ll go reverse of our intros and just share. So, what does implementing a product-first strategy mean to you? Tony, go ahead and kick us off. We’ll share our thoughts and we’ll discuss.

Tony Solis:

Yeah, sure. Love this topic. So, it may be my diverse background. So, I started at the world’s largest network marketing company. And I actually started in manufacturing and distribution. So, I saw the back end. So, the consumer experience was something I knew fully well. And again, I had a chance to focus in on, and really think about.

Tony Solis:

So, I’m coming from that perspective, as well as on the sales and marketing side. But for me, it’s a prioritization on the consumer experience. And everyone else in the retail industry is doing that now. They’re really focusing and customers want high quality products, but in addition to that, they do want a great experience. And we really need to look internally, what is the experience today?

Tony Solis:

They want convenience. How convenient is it? And they also wanted, it’s a demand in the moment. So, they’re looking for it to get to them in a reasonable amount of time. And they’re looking for a good consumer experience. What I like to think about is, what does that look like? So, if you’re in this business, and you’ve been in it for a while. When was the last time you had an order shipped to your home?

Tony Solis:

When you received the order, what did it look like? How many products? Was it all just thrown in there, or did it look like it was organized? What was at the top of the box? Was there content and collateral? And what was that content and collateral? Did you have any promotions in there? But what are you doing to improve the experience? Do you consider your company something that it’s more in line with the Apple experience, where people don’t throw away the box?

Tony Solis:

Or are you more of the Amazon experience, and I just received a shipment yesterday, I bought some batteries. And unfortunately, the batteries came in a gigantic box. So, here are these little two batteries in a box that you could have put in a full-size comforter. So, in the end, made no sense at all.

Ben Dixon:

Did the same thing this week, we have the same experience. That’s hilarious.

Tony Solis:

Yeah. So, somebody’s not thinking about it at all. And I would say that for any company, we should all be thinking about it. So, when was the last time you had conversations with your pick pack, and your distribution center, and you looked at the prioritization of what’s on top? What goes in the middle? What’s on the bottom? And what is that experience when they open the flaps?

Tony Solis:

One of the things, there was a reference to Pampered Chef, one of the things I did there, we put their vision and mission on the flap. So, if you’re a consumer, and you purchase the product from that company, you open the flaps. You were going to find out what was the vision? What was the mission of that company? Because in the end, it’s important.

Tony Solis:

The company’s story is important, and how do we carry that across the consumers? In addition to that, the one last thing I would share outside of the consumer experience, what is it look like on the phones? I’ve worked with call centers for the last 20 years. And I found out it’s all about the amount of time. If you’re reporting on the amount of time to resolve an issue, that may be the wrong criteria for your KPI.

Tony Solis:

What I would say is its quality time. So, what did you do within that timeframe to engage, to win the hearts and minds, and to create an incredible experience for your consumer? If they’re worried about trying to get off the phone as quickly as possible, that’s not necessarily the right message that we should be sending when it comes to our consumers. But for me, it really is about that consumer experience, and how well are we leveraging that?

Ben Dixon:

Holy cow, there was a lot of nuggets there. Before moving on, Al or Alex, any thoughts on some of the pieces Tony just shared?

Al DiLeonardo:

Well, what I wanted to add is my experience, like you said, started 43 years ago as a sales rep right around that kitchen table. So, I can see the customer’s reaction, the product, the Cutco product has been around since 1949. And we started it out as a product-first company. So, we’re American made. And we have a culture that puts the end user experience to the forefront.

Al DiLeonardo:

And it’s really based on we have a saying that we’re trying to create a truly exceptional experience for our users. And the thrill of the innovation, and a strong clearly communicated thing really does help our business tremendously. We rely on referrals, and word of mouth to scale our business, and we consider ourselves a very beloved company because we have raving fans.

Al DiLeonardo:

And when I first started, not everyone knew about Cutco. But now when I mentioned on a plane ride, people on all the different seats say I have Cutco and I love Cutco. So, the quality of the product, the commitment to the quality has been there, and our model has always been based on selling the product to the end user.

Ben Dixon:

One thing that’s so special about your brand, Al, that a lot of other brands have tried to pretend to imitate or copy even traditional businesses outside of direct sales and try to copy is that lifetime guarantee component too. I’ve known that just knowing of Cutco my whole life, but the thought of, “Hey, you know what, not only are we this product, first company where we are teaching and training our promoters to go out there and serve the end customer directly.

Ben Dixon:

But we stand by our products forever.” It’s the Sears promise from when Sears was a company on your Craftsman wrench, was, “Hey, if this wrench breaks, we’re going to give you another one.” And Cutco to this day, your knife shatters, or if something bad happens to it, send it in, we’ll fix it, we’ll get you another one.

Ben Dixon:

That promise trickles down and makes all these effects across the whole organization that says “Hey, we stand by the product.” There’s literally no risk to the end consumer. If they have a challenge with the product, we’ll give them another one. And that allows you to really create a loyal fan base.

Al DiLeonardo:

Yeah. Our guarantee is fantastic. And it just really supports the customer. It’s totally around the customer. Forty-three years ago, when I sold someone Cutco, if they send it back now, they can get it resharpened, refurbished. And they will bring it up to date for many, many, many customers that we have. So, we have about 16 million customers that love the product.

Ben Dixon:

That is amazing. And can you speak to a bit of just the onboarding training because you started that relationship? One thing about your product-first strategy that you’re known for versus just other companies in the world, is that you immediately start off with a game plan with every single person that comes into the company of going and doing real demos with their customers. And that was hard to do during COVID this last year.

Ben Dixon:

Everyone who’s watching, everyone was on the stream, everyone is on a replay. They all got it with COVID too, and going to make some major shifts during that time. So, walk through just real quick what you tell people to do in their first two weeks in Cutco and the culture of that so people who don’t know can hear about it. And then, walk us through what the shift was like this last year. And then, we’ll go to Alex, go ahead.

Al DiLeonardo:

Yeah. The major shift that we made is taking our presentation from around the kitchen table, where we would cut tomatoes, rope leather, and cut a penny with the shears. That’s part of our presentation to show the quality of the knives, and we went to a virtual presentation. So, we started showing people virtually last March when the pandemic happened, we taught our reps how to do it.

Al DiLeonardo:

And I really think because it is a product-first company, it really did help our sales, that customers knew the product. If they didn’t have it, they knew somebody that had it. And it’s because of all the raving fans that we had out there, that customers would buy it without touching the product, without cutting the row, without cutting the leather, without cutting the penny. And our sales dramatically increased both in the direct sales line, the ecommerce line in a big way.

Ben Dixon:

And also helped that everyone wanted to cook at home a little bit more last year.

Al DiLeonardo:

That definitely did not happen. That didn’t happen. People were home and wanted to get good quality knives.

Ben Dixon:

Hey, I know when I stepped on the scale, I can tell I’ve been eating a lot the last year. So, yeah, I’m on the upswing. So, let’s shift the moment. Now, Sanki is a company, for those of you that haven’t experienced Sanki before, are amazing wellness products that use Japanese technology.

Ben Dixon:

And Alex’s family has had a vision for years that’s led to this product-first culture that literally bets the farm on the quality of the product. And so, I want to take a moment in this question. And just from Alex’s perspective, what do you feel implementing a product-first strategy means to you?

Alejandro Lopez:

Thank you. For us, it means everything because when I started as a distributor 20 years ago, I was part of an opportunity-driven company. And I didn’t like the experience. So, then I decided to found my own company in 2003. And I ended up with two products because I ended up with OEMs, different manufacturing facilities that could make me milkshakes, juices, vitamins, minerals, weight loss products, et cetera.

Alejandro Lopez:

And in 2009, I found the answer to my search, and I ended up partnering with a Japanese company had been developing for more than 40 years, a specific technology on longevity. So, that’s how I started Sanki in 2010 with just one product. Having a red ocean company, I moved from a red ocean to a blue ocean Strategy company. And we moved from 90 different products to just one product.

Alejandro Lopez:

And from there, we started growing. So, for us, means everything. And we’re a product-centered product-first company. And it has worked because these technologies really work. And we can show it to our customers, we have Japanese micro scanners that can show you before and after you take the product. And we show you the microcirculation.

Alejandro Lopez:

And you can see how, in 15 minutes, this circulation improves in all the cases. So, because it’s so important for us, we have heavily invested on the product on the technology. We even own the farms where we obtain the natural ingredients to process the biotechnological process, these technologies, and these products that we can send to the end customer.

Alejandro Lopez:

Today, more than 80% of our orders come from raving fans, from customers that love the product. And when I started as a distributor 20… as I was thinking 20 years ago, it wasn’t an opportunity-driven company. And I didn’t like that because what I’ve seen in the majority of the cases is that this type of companies are a short- term vision companies. Usually, they don’t last more than 10 years.

Alejandro Lopez:

So, if you’re thinking the long term, if you’re thinking on having a legacy company, then you need to start looking for these products that can be innovative, disruptive, and can really solve one of the needs that the customer has.

Ben Dixon:

Alex, I love what you just shared because it rolls right into our second question for today. And it’s really important because it was your experience is if you ran into a fellow… our question was if you run into a fellow executive today, and they’re struggling, because the company they’re running is an opportunity-first company, and they’re fearing the same thing you shared that there’s just this rocket ship that’s going to, and then burn out, and fizzle, and be done.

Ben Dixon:

What do you say to that person that’s desiring to change to a product-first culture? And where would you even invite them to start? Your journey went right to literally, the product formulation. And it being something special that actually had a proven result that you could see in 15 minutes, that’s where you had gone. But where do you even start? If you look up one day and say, holy cow, that’s me. What would you say to that?

Alejandro Lopez:

Actually, it was me. Because before that company, I have another one that I founded in 2003. It operated on until 2009. And we ended up being an opportunity-driven company because the products had no difference between the others that already existed in the market. So, I think that the issue here, and the challenge is to find something that is really innovative, and to find a product, a service, or the way you market it that really stands out from the others.

Alejandro Lopez:

And that’s basically, what I call value innovation. When you are capable of innovating and offering great value at the same time. That’s the foundation of a blue ocean strategy. So, you need to think of what you can eliminate, what you can reduce your company, you can increase and what you can create. These four factors are essential to create a value innovation strategy that can end up sending you to a product-centric product-driven company.

Alejandro Lopez:

It takes time. It’s not easy to find. It took me, in my case, seven years. And part of my story, you know it. I ended up in a meeting in my office with us biotechnology, nanotechnology, scientists, from friends that lived in Japan. And he invited me to visit Tokyo, and his facilities and his labs. And I took his word. After he left, I bought the plane ticket immediately. And I was there three days after him, and that’s how we started Sanki. That’s the story.

Ben Dixon:

I love it. You got to take action. Holy cow. If you’re feeling that side, and you hear it, and Al, know what you want long term. So, what did he have there? Long-term vision, holy cow, long-term vision. I love this word value innovation. Because the truth is, you think of Al over Cutco, it would be rude to say, but nothing special about knives in the sense that there’s lots of different knives.

Ben Dixon:

And what’s the value innovation? Oh, sharpness, the knife. If it breaks, we’ll replace it for free for your life. Wow, wait a minute. That’s a value innovation of Cutco versus Henckels. You say, well, do you want the Henckels or the Cutco? Well, Henckels doesn’t fix their knife for you when it breaks. So, it’s value innovation, right there with the proving the result.

Ben Dixon:

I’ve seen this. I’ve had clients in the wellness space, that just add a little niacin into their wellness products. So, it makes someone’s face flush, and they feel like it’s working, and weird tricks that people do in our space. And that’s not what you’re doing here. Here’s Alex saying no, we do the scanner, and we show them hey, look, it’s making a difference in your life. That is really strong stuff.

Ben Dixon:

Al, let’s go to your side. We’ll swing back around. What would you say to someone on the outside that’s struggling in the boat? Alex was in 2003. From your experience at Cutco all these years, what would you say to them, the first steps to take to shift to a product-first culture?

Al DiLeonardo:

That’s a tough question for me, because are always been with this type of product. And we’ve always been a product-first company. So, it’s all I’ve ever known. But my advice as I think the question would be to create a long-term quality product, that has a lasting impact with people. Because if it has a lasting impact with people, it’s not one and done.

Al DiLeonardo:

It’s several sales. We constantly have repeat customers who keep buying the product for themselves and for gifts. The other thing is that they purchase a product many times at some of our fairs and shows, our booze, things like that. So, our model is that the compensation for the rep is geared towards, and not recruiting.

Al DiLeonardo:

So, if dollars to spend, where the dollars go to, the sales opportunity, or is it going to go to increasing… it says that my internet is unstable. It goes to increasing their percentage based on sales. So, we have a percentage and as they sell, they make more and more, and that’s where we put our dollars on the product.

Ben Dixon:

That’s a strong tip as with many of you, look, there’s a challenge, there’s actually came up in a lawsuit here in America that came over Neora just a little bit ago that many of you probably read. And that the challenge that’s in a lot of comp plans, Al is actually hitting on all across America is that we have this retail commission. That’s the difference between retail and wholesale.

Ben Dixon:

And then, wholesale, and all the compensation based on wholesale. And normally, the only money that goes to the direct person that made the direct sale, on a lot of comp plans is that retail commission. But if they’re selling to people where an auto ship incentive takes it down to wholesale price, or your other incentives take that away, watch out.

Ben Dixon:

You should hear Al’s words team, because if the person making the sale isn’t making any money, holy cow, you have an issue. And number two, hear what he said about scaling that number. If you truly want people to go get more plain old customers that are not reps with internal consumption, but plain old customers to purchase your product and enjoy it.

Ben Dixon:

Are your incentive structured in a way where, hey, you get this much percent if it’s this many different retail customers this month? And guess what, you get even more if it’s even more retail customers this month? Because now, what are you doing? You’re putting that carrot out ahead of saying, hey, you know what, we want you to get 10 retail customers every single month in your business that aren’t ambassadors, distributors, representatives, myself consumption.

Ben Dixon:

Now, I love this question hearing wherever it’s come from, and [inaudible 00:24:22] like, hey, I didn’t have to move the product for strategy. I was born that way. Hey, good, it’s cool. And then, Alex sharing that, hey, I had to, it was tough. Tony, I know from our previous conversation, you’ve been inserted into those situations where like, holy cow, I didn’t come from that world. But now I’m in it. What do we do? So, what would you share to that person that’s in your space? Yeah.

Tony Solis:

Yeah. So, I’ve been invited to many of those burning homes. So, I’ve been asked to come on in, and help put out the fire, and redirect the company. So, I can tell you firsthand from corporate roles, and then also, prior to Avere, I worked in consulting the last three years. And primarily, startups, but a lot of turnarounds, and this is a big part of the conversations I’ve had to have.

Tony Solis:

So, I would just take it right at the very front, your question is, what would you tell them? I’d say, first question you need to honestly answer for yourself is how did you get here? So, we have to look back. And we have to look at how we got to this and in the period of the company. And I’ll tell you, sometimes you need that person on the outside, if you can’t have that honest assessment yourself.

Tony Solis:

But I would tell you that it really is important, because I have seen some incredible companies with some incredible innovative products. AS a consultant, they would ship me their products, they were so excited, “Tony, try this product, you’re going to love it.” And I try it for three days, I’m like, “Wow, I feel the results. It’s incredible.”

Tony Solis:

And then, I go on their website, and I don’t see a product testimonial, I don’t see anyone referencing how the product has changed their life, I don’t see anyone referencing the incredible difference it’s making for them in their health, and wellness, or in their beauty, or in their personal care. What I find is opportunity. So, how did we get here? Well, we get what we recognize and reward.

Tony Solis:

And that goes back to Al’s point. So, if you’re recognizing you’re rewarding, coverage and productivity, and the IBO aspects of the business plan, or the comp plan, then that’s what you’re going to have. But you do have to do an assessment. You have to go back, and you have to do root cause analysis, before you start coming up with courses of action.

Tony Solis:

And I’m here to tell you, I get asked a lot, I get invited in, they fly me in, I go into the room at corporate headquarters, and they say, “Tony, how do I fix this?” And I’ll say, “Well, first and foremost, what’s the problem?” And a lot of times, it is corporate because corporate provided a product, and they provided a compensation. But they didn’t provide education and training.

Tony Solis:

They didn’t provide leadership development. They didn’t provide a strong story behind the products. And they didn’t recognition rewards. They assumed all of these factors would be picked up by their leadership. And so, by limiting themselves, and only focusing in on providing the product and providing the commission, again, you’re allowing your field in many cases, or maybe not, to drive these aspects.

Tony Solis:

And it can drive your business to the point where you are, an opportunity-centric company, and I’ve seen it firsthand. But you got to be an honest broker, you got to really look at that. But yeah, before you can solve the problem, you have to understand what the problem is. When I go into companies, and I take a deep dive into their KPIs, what I find on the daily, weekly and monthly KPIs, a lot of times they’re looking at all of their IBO information.

Tony Solis:

In other words, they’re looking at recruitment, they’re looking at title advancements, they’re looking at their fast start promotions. They’re looking at their incentive trips. But then when you ask them to start talking about the other aspects of the business, well, what’s your consumer experience? What’s your retail numbers? What’s your preferred customer ratios?

Tony Solis:

How is your conversion from a retail to a preferred customer? What are you guys doing for promotions right now? When a customer purchases a product, what emails are you sending out? What’s going in the box? Some of the best companies I see in network marketing, when I opened the box for their products, it’s not an opportunity testimonial, they have a picture of somebody that loves the product, and tells their personal story about the product.

Tony Solis:

It’s incredible. I keep them whenever I get them. There’s not that many I get, but at the end, when I do get them, I keep them because I’m like, “This is incredible, because this is really leading with the product.” And I would say there’s a lot of companies unfortunately out there that are struggling with this. And some of it is because it’s not because of what they’ve done.

Tony Solis:

It’s because what they haven’t done, which is they haven’t built it into their training and education. They haven’t built it into their recognition rewards. One of the best companies I saw out there spends half the time on recognition as recognizing individuals that sell the most in any one product. So, in other words, they’re not recognizing Lucy because she just attained the rank of a director.

Tony Solis:

They’re recognizing Lucy, because Lucy in the last 30-day period has sold more of this product than anyone else in the US business. And this is what’s coming across the screen. And this is what they’re talking about, this is what’s creating excitement. And then, Lucy jumps on and says, “Here’s how I’m doing it, guys, this is how I’m selling this product. This is why I’m so successful selling products.”

Tony Solis:

And in the end, that’s what carries the story forward. And that’s what helps move the ball. But it is a big field. And there’s a lot to do in this area. So, it’s not going to happen overnight. But first and foremost, what do I say to that individual? I say how did we get here? And have that honest conversation

Ben Dixon:

I love that question. Go ahead, Al. You have a thought, yeah. The question, how do we get here? It opens up another component that you should have in the box and the card that it’s just perfect to talk about real quick is that beyond having your planning and your experience for distributor compensation, what is your customer rewards model?

Ben Dixon:

I have seen a number of my own clients and people work within the space with that postcard on top of the box when the box open, that’s if it’s one of those, whether it’s skincare, weight loss, if it’s a before and after situation of, “Hey, take a selfie of a little postcard, take a selfie of yourself and take an after one in seven days, and send it into stories at ourcompany’sname.com.

Ben Dixon:

And what I love about those projects, because they don’t put it straight on social media for compliance at times, they want to review these stories, is not only are the clients able to collect all these stories, and fuel the best ones into their social media sharing engines for their sales people, and their sales tools. But they incentivize rewards on the customer getting involved and sharing their story back and the conversation back.

Ben Dixon:

A company named Beachbody did this very, very well, and has the last, gosh, four-and-a-half years now with their $1,000 a day challenge of literally saying, “Hey, if you send in your before and after into the portal, and we highlight your story, if you’re the one that’s highlighted for the day, guess what, we’re going to send you $1,000 in cash just as a thank you,” to the retail customer for just sharing their story and doing a good job losing weight.

Ben Dixon:

Other companies, I’ve had clients give baskets of goodies, and gift cards, and all kinds of things to one person a month. Maybe you’re watching this today, and you’re like, our company can’t spend $30,000 a month on that reward because we’re only doing half a million dollars a month in revenue. Totally, you’re a smaller business. Hey, you can always do one $500 gift card a month and pick your winner of the story. But it’s huge to bring them right in the customer rewards.

Ben Dixon:

Also, the conversation incentivizing them to reorder, I’ve seen a lot of traction. And even executives here on this line have programs in place where, “Hey, if you’re on Autoship for two months, you get this free shaker bottle. If you’re on Autoship at month four, you get the t-shirt.” There’s some cool stuff that’s going on in the space that’s making a big difference. And there was a lot that was just shared there, team. Before we move into the next area, Alex, do you have any additional thoughts you wanted to add?

Alejandro Lopez:

I completely agree with Al and Tony. Maybe one question, a good test for a company should be to ask this question. Will I be able to sell this product in a different channel that is not an opportunity-driven channel? A network marketing channel, distribution channel. Can I be able to sell this product on retail at this price? That’s a good question.

Alejandro Lopez:

Because when you ask that question, you see the products, and you see the price, and you see the quality, you say immediately, this cannot be solved in other channel, except this one because there’s an opportunity is pushing, instead of pulling. It’s the difference between pulling and pushing the product.

Ben Dixon:

So, does it pass the farmers’ market test? Can you go to your Saturday morning farmers’ market in town down at the river, and set up a table, slap the product down, and would people pay you for it? Is that what we’re saying?

Alejandro Lopez:

Yeah.

Ben Dixon:

I love that. That is a great test. Go ahead.

Tony Solis:

And if I could jump in real quick based on Alex’s point, that’s a great point. And just recently in our history, there was a network marketing company that was asked to give up their MLM side of the business. And they were able to do so. Why? Because they had over 3.5 million customers at the end of the day. They had six customers for any one IBO.

Tony Solis:

So, in the end, they were able to pass that test, and continue the business, and go forward. Whereas, many may have to close their doors. Because at the end of the day, if they’re asked just to leverage only their consumer side of the business, only their retail preferred, they’re just not in a position to do that. So, it’s a great test for many companies.

Tony Solis:

And it’s a great question, are you in a position where the vast majority of your sales are coming from an end-line consumer? And in the end, you’re able to just run on that business? Are you able today to keep the lights on with that business? And if the answer is no, then you have some work to do.

Ben Dixon:

That’s fantastic. Let’s unpack a little bit for those who are here. What have you found to be the hidden benefits of putting total focus on the customer experience versus leading with the opportunity? I think everyone comes to the table thinking, “Oh, this is going to be good, and that’s going to be great. Oh, wow, won’t that be wonderful?” But then, there’s those hidden things.

Ben Dixon:

You’re like, “I never saw that coming. But honestly, I love that part.” I’ll just share before as you think about it, team. Al’s comment about being on the airplane and saying, “Yeah, I’m with Cutco.” And people being like, “Yeah, you’re with Cutco. That’s awesome. I love the product.” I was on the phone with an executive earlier this week, who’s with the biggest MLM company in the world.

Ben Dixon:

As far as revenue on the DSN top 100, and he shared that he never said this publicly, but the part he always didn’t like was when you get on an airplane, and he didn’t want to say the company he was with. Because people have all kinds of misconceptions about it. That’s special. That’s a hidden benefit of a product strategy versus an opportunity for strategy, which is very evident in the difference between those two companies.

Ben Dixon:

Just saying that the A that ends in way. You get that. So, what would you say you’ve found… and we can got to Alex first, and come back to Al, and well let Tony end it, have been the hidden benefits, you would say? Just after you got 11 years under your belt now, Alex, on this side of the coin, what did you not expect that you’re grateful for?

Alejandro Lopez:

Well, for me, it’s about congruence, and about certainty to our distributors. If you are congruent, if you do what you’re saying you’re going to be doing, and if you say that you are a wellness company, or a longevity company, or whatever, then you need to mean it because that’s my point. And an opportunity-centric company driven company is offering money, and money today is a commodity. You can get money in many different forms.

Alejandro Lopez:

So, it’s a short term strive for me, if you go that way. So, in one word, I could say that gives true, certainly to our distributors that they are we working for something that will last, that will not disappear in five, 10 years. And if you build that, certainly, you build under trust on building with a company, and that creates a culture that is moved around trust, around honesty, around certainly, courage and all the other benefits have come from being congruent.

Alejandro Lopez:

So, it’s a building on a strong foundation, and having strong roots to sustain the company in the long term. Otherwise, you can end up selling even $1 billion. And suddenly, you disappear. Why? It doesn’t make any sense to me. And that has happened a lot in this industry.

Ben Dixon:

Great, great point. If you’re looking for a technical book to unpack what Alex has shared, Stephen Covey’s son wrote… and so Covey wrote a book called The Speed of Trust. And it unpacks exactly what Alex just shared everybody. If you want to take that idea deeper of okay, it builds confidence, and then confidence builds longevity, longevity builds trust.

Ben Dixon:

Across your whole organization in teams, there’s a really great textbook of that. If you check out Stephen Covey’s Speed of Trust, just as a light note. That is a huge hidden benefit because he can’t buy trust. You can’t, you have to earn it. That’s the hardest thing about trust. That’s a really good word, Alex. How about you, Al? You’ve been in it since the ’70s. Can you see after just from what you’ve heard around the industry, what the hidden benefits are that you’ve gotten to enjoy from having the culture you’ve had?

Al DiLeonardo:

Yes. I think some of the hidden benefits. In our company, we have two names. We have Cutco and Vector. And really, it signifies the difference between the two. And when I go to DSA, Direct Selling Events, I say I’m with Cutco Vector, Vector Cutco. I interchange them, but Cutco is the product, and that it product first, and then Vector is the sales opportunity.

Al DiLeonardo:

So, what I think, it’s interesting, Alex mentioned the word trust, because I thought about trust and loyalty. Loyalty that the customer has with the brand, and it becomes a brand worth talking about. It’s about quality, quality, quality. And if you have a product that’s good stuff, 42 years later, it’s still good stuff. And that really helps tremendous confidence with the sales rep.

Al DiLeonardo:

Tremendous confidence, not, “Hey, I bought that product. When they run into a customer that already owns it, and it didn’t work.” When the products are high quality and working, that really helps with the actual opportunity. So, one thing feeds off the other. I thought of the brand that has a compelling mission, and differentiates our company from other cutlery companies in the industry.

Al DiLeonardo:

And it really does help with product claims when you have a high-quality product that last. And there’s quite a few direct selling companies that have great products. And you’re like, “Wow, that’s a really great product.” And it helps with the product claims, that the product last, that the product is what everybody says it is. And that helps with the trust and loyalty.

Al DiLeonardo:

So, to me, it all ties in. To me, it all ties in. And then, there’s what I believe is the bad vibes that the direct selling industry gets. And when it’s based on opportunity, people say it’s a pyramid scheme, and you got to recruit all your friends to bring the money in. And that becomes less and less, and less eliminated when you have a product-first opportunity.

Ben Dixon:

Yeah. You actually incentivized to earn more from serving a plain customer than just recruiting somebody else, speaks a lot. And one note, Tony said earlier that you’ve done very well on your culture, is that you train for it. You train for it. You set the expectation that you’re going to go out there and gather. And that seems normal to you because you’ve been doing it for 40 plus years.

Ben Dixon:

But there’s a lot of companies that are listening in, even you’re probably on the stream gang, and you don’t believe in train how to get a retail customer in your world. You don’t, it’s not in your training videos, I’ve watched them. And man, hear that, if you want the trust, you want longevity, these are all free things. Man, go check that. That’s just a note that popped up as Al was talking. Go ahead, Tony, what would you say? Have you found that on both sides? What are the hidden benefits that you just don’t see right away of this kind of culture?

Tony Solis:

Yeah, no, going back to trust, I firmly believe that, as Alex and Al said, at the end of the day, you must have trust. And you do this by being humble. As a company, we should always have humility. You build trust, respect, respect for your business partners. And lastly, belief, belief in the industry that we’re in, because it’s bigger than all of us. This industry has been here longer than all of us alive.

Tony Solis:

As I said, I started my, my first role outside of the US Army was with the world’s largest at that time. And I learned so much of the history because they had been in business over 100 years. And in the end, we talked about that history. So, there was some research done years ago, and I’ve really held on to these numbers for the last five to seven years when I go into companies, and I talk with them, and I look at their content, their collateral their events.

Tony Solis:

But these numbers were this, 54% product enthusiast, 24% affiliator, and then 22% business builder. And what that means is they’re saying that in any one company, you’re going to find approximately 54% of the people that come to your business are coming because of your product. So, they’re connecting with you due to your product, those are product enthusiasts.

Tony Solis:

Twenty-four percent, the second largest number is affiliators. They’re actually coming for the recognition. They’re coming because they connected, and I heard Al talk about it. Your story is as important as your product story. They’re connecting with your vision, your mission, your principles, your philanthropic, what’s you’re investing in, recognition rewards, getting something outside of what they do day-to-day in their corporate roles, or in their day-to-day jobs.

Tony Solis:

And then, lastly, the smallest group is 22%. And that’s your business builders. But yet, when I go into companies, oftentimes, what’s the first thing they want to talk about? They want to talk about their business builders. I just had a company yesterday say talk to me about recruiting. They always want to talk about recruiting. They always want to talk about title advancement.

Tony Solis:

They always want to talk about an aging demographic within their leadership ranks, or they’re just not pulling their weight in all these issues. And yet, they’re not talking about, again, the largest group, the product enthusiasts, they’re not looking into the affiliators, and they’re not putting the time and energy into these areas.

Tony Solis:

And when I look at events, I like to say, well, was 54% of that three-day conference spent on product innovation, on the newest products coming into the business, on customer promotions, and things to get all excited about? Are you getting them jump in other… were you giving them samples of products that are coming out in 90 days, pulling the curtain back, and tell them about innovation that’s going to be ahead of everyone else out there?

Tony Solis:

Not likely. Unfortunately, that smallest percentage, that 22%, that business builder can overwhelm a company. And that’s where that balancing act comes into. But I look at that 54, 24 and 22 every time I go into a company, and I say so how well are we doing this? Are we following these guidelines in our content, in our collateral? How we spend our time on a daily basis?

Tony Solis:

But that’s a real focus because at the end of the day, if you want to make it past year 10, and I love that you reference that, Alex, because you know what, when do I get the call? Five to seven years. At five to seven years, I get the call from companies that are like, “Hey, something’s not working, something’s not right. We’re plateauing, or we’re worse yet, we’re going into the red.”

Tony Solis:

And it’s because they led with the opportunity. And at that five- to seven-year mark, for whatever reason, that’s a magical moment in time where the bills come due. And in the end, at that point, if you don’t have a very strong customer acquisition program, and you’re not driving an inline consumer experience, and you’re not focused in on bringing that to the table, unfortunately, you’re going to find yourself in a difficult position.

Tony Solis:

So, retention is big. Retention to your consumers, retention of your preferred customers, and how you’re able to manage that. But now, I see that as the number one thing.

Ben Dixon:

There’s a famous quote. Oh, go ahead. Yeah. There’s a famous quote that says, “Those that don’t learn from history are doomed to repeat it.” And I love that quote, because there’s some prime examples literally in the last 10 years. One, if you want to look it up, if you’re watching today, and you didn’t follow MonaVie at all.

Ben Dixon:

MonaVie’s story, from the sell of Synergy WorldWide, Nature’s Sunshine, and the split off of Agile MonaVie, MonaVie massive growth, debt from the funds. It’s opportunity-first driven companies, singular product, wasn’t product first, was completely opportunity driven, opportunity first, hit massive numbers. Three million active distributors, broke huge records.

Ben Dixon:

Shattered our world in 2008, and ’09, and then, in 2010, head infrastructure for three million distributors, and publicly had what, 400,000 active distributors, less than. They’re almost down to 10% of what they built infrastructure for. And if you follow the company Jeunesse that bought MonaVie, was literally able to buy them for a steal of snatching their bad debt, because they couldn’t execute on their promise.

Ben Dixon:

So, that’s a short snippet of you could Google it, and read quite a few articles about that. But if you want to see some history that you don’t want to repeat, we go look at a group that hit three million active distributors, and lost it in less than five years. Okay. That’s just a good one to say.

Ben Dixon:

There’s lots of different reasons we can unpack for hours going through the story of that. But let’s wrap the call with our final question. This is a short one, but it’s one of my favorites. So, if you could go back five years, and tell yourself just one thing, Alex, what would you say?

Alejandro Lopez:

That’s a good one. I think we should have invested earlier on the utilization of the customer experience. I think that’s very important. And it’s even today, not many companies are into it. But I know it’s really relevant for the next 10, 15, 20 years. So, I’ve heard about it. But now, we’re really into it. Because we know that’s not the future. It’s the present.

Alejandro Lopez:

And I think that maybe five years ago, I started listening to some of this apps and tools that already exist, that have of course, been improved, that we should have invested those days, because that should have been a real first mover advantage. It would have been a breakthrough, a disruption in the way we sell the products in this industry, because we need to move that way.

Alejandro Lopez:

So, for me, I think the message here is that we should always be flexible. And the customers give us the roadmap, the customers, the real customers are the ones that give us the roadmap of where to go with the company, and which decisions, and which investments we need to do at the right moments, because the customers are moving faster, and faster, and faster every day.

Alejandro Lopez:

So, we need to be really aware of what’s happening out there. How the customers are shifting from one thing to the other, and how they want to do things today. How fast and simple they want things to be done and executed. And of course, we have seen it coming, but we need to take the difficult decisions. Sometimes you get immersed with what you’re doing.

Alejandro Lopez:

You’re being successful, your KPIs are apparently the best ones ever. But you should always be seeing 360 degrees suspicion. So, maybe that’s what I should have done five years ago.

Ben Dixon:

Solid word. How about you, Al, if you could rewind five years, what would you tell yourself?

Al DiLeonardo:

I would say the one thing is to question everything, and to challenge everything. I’ve been in over 40 years in our business, and I really feel that I’m always grown as an executive. And the pandemic has taught us a tremendous amount about our business model, thoughts that we had that were ingrained in stone. But we had a thought that the customer had to touch and feel the product around the kitchen table in order for us to make a sale for the customer.

Al DiLeonardo:

And I taught that from the days of running set seminars on the product to up and coming times. So, I’ve been telling my executives to question everything, to challenge everything. The pandemic has been a good venue for that. It was good. I don’t want to act like everything has been good. But it has allowed us to question everything. So, that’s what I’ve been telling the executives. Let’s question everything. Let’s come out of it different than we went in.

Ben Dixon:

You’re not alone in that thought, Al. I was on the phone with Jill, who founded Tastefully Simple. And I built a social media sharing engine with her, and she had the same belief as you for years of people got to taste the jams, and jellies, and beer bread if they’re going to buy it. They got to taste it first because that was all you know when you start a company.

Ben Dixon:

And when you realize, wow, someone could see a picture of a recipe card on social media, and they’ll click and order the spice packet, one second. That’s a lot easier than showing up at their house, and doing a cooking demo. Holy cow, I didn’t know it could be that simple. For some of our clients today, they’re selling in the clothing niche, or the jewelry niche, where they’re just sharing simple looks on social media, or selling makeup, or they’re sharing pictures of smokey eyes on their Instagram.

Ben Dixon:

And people are just clicking and buying the mascara right there. It’s like, wow, this can actually be simpler and fun if we frame it properly in our world. So, let’s rewind for Tony. So, besides saying buy Bitcoin, Tony, what would you do if you could go back five years ago? So, I told Al that over the phone. Al said what’s this question? I said, you could say buy Bitcoin, but here, besides buy Bitcoin, if you go back five years, tell yourself one thing? Go ahead.

Tony Solis:

And I have the Bitcoin story. Because a colleague of mine at the Pampered Chef in 2012 walked up to me and said, we need to do this. And it was, I think $8.50. And I said no. I said, I don’t know what this is. And it doesn’t make sense to me. So, trust me, I have a hard time sleeping at night. But that being said, I really do like Alex’s and Al’s.

Tony Solis:

They make it hard for me going last because I do believe technology. So, it’s all about social selling. I believe that a lot of companies, we’re used to the belly-to-belly, the belly of belly is in the story for years, and this is how it’s done. And this is how we’ve always done business. And I do believe that we have to change, and adjust. And it’s not about creating just a new approach, and just pivoting completely.

Tony Solis:

It’s about having additional ways that you can engage, the end-line consumer. So, making sure that you have various pathways, not just one, because that one may shut you down. So, those are great. The one thing I would say, I love, Al, I love what you said about no question everything. I do that on a daily basis. That’s just what I do.

Tony Solis:

But in the end, I would say that for me, it’s then once you’ve questioned everything, it’s identifying one thing. So, just pick one thing. I read somewhere where they said billion-dollar businesses can manage up to 10 things at any one time. But if you’re not a billion-dollar business, it’s one to two to three things that you focus in on.

Tony Solis:

So, I would just say one play at a time, get your blocking and tackling in order, and just tackle one thing at a time. And then, look, and watch, and evaluate, and revise, and adjust based on the success and/or failure of that one thing, but one thing at a time. The one thing I would say is the Hail Mary pass has the lowest percentage of achieving. So, it’s the lowest percentage of play that you can have.

Tony Solis:

So, don’t try and fix it all at once. Pick one little thing, and the little things make the difference. The last thing I would just share with the group, so oftentimes, companies, when they talk about, “Hey, what should I do?” They add it to their plate. But what I would just ask companies to do and think in terms of is, if you’re in leadership, it’s not necessarily what to do more of, or to add to your plate, it’s as much about what do I need to take off my plate?

Tony Solis:

So, when you’re going back to Al’s message about question everything, look at the things that are not bringing back a return on investment or a low return on investment, or that take a lot of effort, and energy, and for the amount of investment, or for the amount of return and look at those things. Because I do believe at times, it’s about what can I remove from my plate, as much as it is about what can I put on my plate?

Ben Dixon:

Because once you remove things from your plate, you can find yourself more successful. One thing that helps me with one company, I heard the reference said the number of products, less products, more marketing. For every five products, we have one top seller, and we have four slow movers. Those slow movers tie up our marketing teams just as much as that one fast seller. So, in the end, less products, more marketing, and focusing on that, and you’ll see amazing results. But that’s my thoughts.

Ben Dixon:

One key from everything the three of you just share it on that last question. Another book plug, if those of you, I read a lot of books, and I think for any of you watching, if you want to follow up and take action, you got to feed your mind every day. Gary Keller, founder of Keller Williams Real Estate’s book. The ONE Thing will actually give you a daily framework and questions to ask yourself that would have helped with each of those three scenarios, team.

Ben Dixon:

So, if you’re watching on the stream right now, or watching on replay, another great action step from today’s DSEF open forum, go grab the audio book, ONE Thing Gary Keller really solid frameworks to help unpack that. We went way over the time I promised each of you. So, thank you, I’m more grateful. The forum was made as a tool to bless all the executives in our space and other organizations.

Ben Dixon:

We won’t name them in our direct sales space, but had seemed to be more political than actually having raw conversations about what affects our businesses these days. And so, I’m very grateful just to each of you, to you, Alex, to you, Al, to you, Tony, for taking the time today just to share the real stuff you’ve gone through in your careers in your life, with all the executives watching on the stream, and the people on replay here at the DCEF.

Ben Dixon:

So, I really appreciate you. I learned a lot today. We’ll get this call transcribed. And all the notes posted up on replay to share with the executives who are on the replay as well. But thank you so much for being here today. I appreciate you. I wish you all the best in your endeavors together. All right. Well, have a wonderful day.

Alejandro Lopez:

Thank you.

Ben Dixon:

All right. We’ll talk. See you soon. Bye for now.
 

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Want to learn more about our speakers?

Albert DiLeonardo, CEO at Cutco
Alejandro Lopez Tello, CEO at Sanki
Tony Solis, Prev Director at Pampered Chef
Ben Dixon, CEO at NaXum