The Last Word
September 2010
The Fourth R: An Industry Responsibility
Direct selling is the ‘Marmite’ of the business world – people either tend to love it, or hate it, and there are very few who sit in-between. Talking to people about direct selling over my 11 years with Herbalife, it seems that the reason most people dislike it is a basic lack of knowledge. A lack of understanding – or more appropriately, too much misunderstanding – has to be a major barrier to successfully growing our business, and indeed the entire industry sector, which can’t be ignored.
We are all aware of the importance of the 3 Rs – Retail, Recruit, Retain – to any direct selling business; the time has come to recognise the importance of a fourth R – Reputation.
As we celebrate our 30th anniversary this year, and having just reported our largest ever quarterly growth in Q2 2010, Herbalife is as good an example as any of how a company can benefit from a real focus on enhancing its reputation.
Looking back over the past 30 years, our approach to our reputation and how people perceived us was not always as it should have been. We didn’t talk to the outside world and they didn’t talk to us, but they did start talking about us, and others were more than happy to fill our communications void in the form of misinformation and unchallenged falsehoods.
It is clear that the company didn’t realise fully the long-term impact of some of our actions and policies on the reputation of both our business and on the industry in which we operate. Today, the world is a different place; attitudes are different and Herbalife is different. It’s a world in which reputation is unavoidably global – it can no longer be isolated by market. The internet, and more recently the phenomenon of social networking and user-generated content, means everyone is now an opinion former. As a company we recognised the need to address reputation as a core element of our plans and ensure that, in everything we do, we can be a proud ambassador of our industry.
We have invested significant resources into creating a brand and image that everyone associated with Herbalife can be proud of. We have really raised the awareness of our brand through our sports sponsorship program across the region, making it easier for our Distributors in those early conversations. Our commitment to our charitable program – Casa Herbalife – has never been greater, having increased the number of charities we are working with from one to 18 over the past five years. Most important, we’ve turned our communications around 180 degrees with a programme that proudly engages with those who want to have a conversation; educating and informing them about the business we are, and the industry we operate in today.
Reputation has become core to all that we do, but it can’t be just about marketing. It has to be about daily behaviour and the experience consumers have of the brand. Our business has become more retail led, with long-term customers and the opportunity for daily interaction with those customers. Our increased emphasis and investment in policing compliance and ethics amongst our Distributors helps to ensure every one of these interactions is incredibly positive.
The reputation of the direct selling industry can only be as good as the sum of its parts. It’s the reputation of direct selling companies that can help or hinder the negative misperceptions which still exist around the world. No matter what we do in the other 3 Rs, if we don’t get the fourth one right, much of our hard work and efforts are wasted. Each one of us must take responsibility for how we represent ourselves, and therefore the industry. Only then can we really establish direct selling as a credible business model, which will ultimately bring associated value to us all. The good news is that, as well as the value it brings the industry as a whole, investment in your own ‘fourth R’ also brings significant benefits to your company and Distributors.
