His thoughts on the company’s relaunch and COVID-19
Executive: Terrence Moorehead
Location: Lehi, UT
2018 Revenue: $283 Million
Stock Symbol: NATR
SSN: Can you share details about the recent changes you made to your compensation plan?
The changes were made in response to what’s going on in the market-place with consumers and what’s going on in the nutritional industry overall: consumer shopping behaviors, consumer desires and aspirations, and how to stay relevant and address these touchpoints. It also stemmed from a desire to get back to our roots of being a pioneer as the first company to encapsulate herbs. Part of our strategy is to embody and embrace that core spirit of our DNA.
We now have a system that makes shopping for products and joining the company as easy as possible. The rewards and benefits are clearly presented. We have a simple compensation plan linked with an affiliate program and with sharing tools, and we weave those together through technology that pays people and provides rewards within 30 minutes.
SSN: Why are faster payments important for competing in today’s market?
It’s obvious from the standpoint of today’s immediate gratification world, but I think there is also something deeper there, and that is a heightened engagement level within the concept of gaming. It’s a cycle of you doing something and getting a response, and then you want to make it happen again. “Hey, this works!”
I also believe that providing a reward quickly frees up people’s capital to put it to use however they want, which allows us to be more effective and more relevant in their lives.
SSN: Why did you choose to add an affiliate program, and how does it work differently from the consultant program?
We removed ourselves from whatever conventional wisdom would say and really embraced where consumers are today. It’s so natural for consumers to share and to engage with brands. They don’t want to deal with all of the language of uplines and downlines. It’s not natural for people, so they want to push that off to the side.
But there’s a huge number of people who love sharing products and who are enthusiastic and love that magic of being out there influencing other people and sharing ideas. The idea of developing the affiliate program is a very natural evolution for sharing ideas and sharing herbs to help other people.
At the end of the day, our vision is to share the healing power of nature and the healing power of herbs with as many people as possible. So the affiliate program makes sense.
Consultants are professionals, doing this on a fulltime basis. They’re running their herb shops or vitamin stores, or seeing clients on a regular basis to help their health needs. An affiliate is an enthusiast who is sharing. Though many of them are very knowledgeable and skilled, it’s a different level of commitment and engagement.
SSN: In what ways do you help your affiliates and customers build their customer base beyond their friends and family?
We provide them with information and assets they can share broadly, easily and with confidence. That one-click tool for sharing can take somebody beyond their friends and family to generate interest. We also have a training suite for them.
SSN: What happens when a customer comes directly to the website to buy products?
There are basically two types of people who come onto the website: folks that already have a consultant who we identify when they go to checkout, and folks who don’t have a consultant.
We always try to steer somebody towards a consultant, but if they don’t want one we will allow them to purchase the product.
SSN: How do you manage compliance online with so many people posting and promoting the company?
One way is to provide finished materials that help the person avoid having to create their own. When we bring people on board, we have an agreement with them and we provide them with very simple, very clear, animated training videos that quickly walk them through do’s and don’ts.
We also have partners that monitor web activity, and if there’s an outlier, we go to the person directly. We have a long history of doing this successfully.
SSN: What does omnichannel really mean, and how does it relate to how direct selling companies might enhance their digital presence and efforts?
Omnichannel is all about being omnipresent across different channels, and no matter where the customer is, you’re keeping track at any one time.
Now, how does it relate to direct selling? I think we have to change our mindset. The customer is now in charge because they have so much information, so many choices, and so much variety that they can get any product, any time, at any place.
Being omnipresent is simply a realization that we need to be where the customer is, and that if we build an ongoing, healthy relationship with them, they’ll keep coming back to us.
SSN: You’re one of the few companies that allow physical storefronts; how do you address the idea that “somebody has an advantage I don’t have?”
If what they’re saying is, “Hey, wait a minute. You’re telling me I have to be competitive?,” then the answer is, “Yes, you have to compete. You have to serve customers. You have to have a passion for serving customers.” My go-to analogy is Starbucks. Starbucks shops are everywhere; people buy their coffee in gas stations and convenience stores. Do people buy less Star-bucks because you can also find it in the supermarket? The answer is “no.” As a matter of fact, increased presence and increased access actually increase demand.
SSN: What’s the most difficult part of running a public company?
You have to be forward-looking because investors have expectations. They’re demanding, but so are our consumers, and so are our consultants. So I don’t look at it as a negative or a downside. It pushes you and challenges you and forces you to be better.
SSN: The company’s stock price hit a low in March but has been rising pretty steadily since then. To what do you attribute this?
I think it is about us building out a story that makes sense to investors and demonstrating clear evidence that we’re getting the economics of the business right. Additionally, we’re building a consumer proposition that is clearly moving us more towards being relevant. And if you look at the strategies that are driving our business, they’re bold, they’re powerful, they’re transformative, and they really do start to carve out some competitive advantage for our company. Again, that puts us back to this position of being a pioneer and a leader in the industry.
SSN: How has COVID-19 and the lockdown affected your company and your consultants?
It changed the way we have to do business. First and foremost, I should thank our frontline workers who, while the offices have been closed, have kept our manufacturing and R&D facilities going. Those folks have been coming in to the plant every single day; they’re our heroes. They kept us going, meeting the increased demand for our products.
Obviously there are more people who are interested in and sensitive about their health right now. So supplementation is on the rise, but you’re also seeing significant increases in other areas as well. Multivitamins are up 17 percent. Sleep aids, like melatonin, up 20 percent. We’re seeing a surge in demand for many products.
But also, it’s been a real eye-opener for many consultants who had never heard of a Zoom call or used digital tools before. Previously, there was resistance, but now people are much more receptive to a digital toolkit.
And they also realize now that you each have to have that omnichannel portfolio in order to survive and compete.
So I think it created a new run-way for us as we launched our digital strategy. Folks that might’ve looked at us skeptically in the past are now saying, “Would you hurry up, please? Can we get this out? We need this!” And that’s huge for us.
I think if there’s a silver lining, it’s that people are realizing the power and the importance of nutrition and taking care of their health. And secondly, the power and importance of having those digital capabilities that allow you to do business in spite of a pandemic.
And that’s not to take anything away from face-to-face interaction. But isn’t it great that the business can keep going and you can have a much broader outreach when you overlay on top of that some new technology?
SSN: What advice would you now give your younger self?
Besides telling myself to buy Google stock, I would tell myself to be open to and say “yes” to all of the challenges because that’s where all the opportunities are, right? That’s where you can make your mark: the horrendous business unit or the horrendous project that nobody else could figure out that’s been a disaster. When you go in there and fix it, you can really stand out. There’s a tremendous amount of satisfaction to that as well.
SSN: Who has influenced your career the most and why?
I’m not saying it because my mom might read this, but I do think a lot of leadership starts at home. It starts with character.
All the little things that you learn at home, or that I certainly did, like being reliable, keeping your word, being resilient, having determination, treating people a certain way, behaving a certain way.
I think if I stripped the superficial stuff away and got down to what lies underneath and what keeps you going, it probably started at home with my folks.
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