WD-40 in your hand lotion?
Well, not exactly, but some of the same ingredients in the storied lubricant have also been used in cosmetics for years.
It was that sort of thing that prompted a brother and sister in Provo to launch their own product line 25 years ago this month.
When Steve Lund sat down with Blake Roney to get the paperwork filed on the new company in 1984, they hadn't yet nailed down the name. First was Nu Skin, Inc. Then Lund suggested Nu Skin International -- a serious name for a company that didn't exist yet.
"I will tell you that we giggled when we wrote it," said Lund. "Then Blake said, 'No, no, how about Nu Skin Intergalactic?' "
They stuck with "international," and quarter of a century and 50 countries later, the name seems prescient. The company is headquartered in a 10-story tower on Provo's Center Street that's stuffed with hardwood, granite, a chic restaurant and original Norman Rockwells.
"I didn't have any clarity," Lund says, "that Nu Skin was going to grow up and be a billion-dollar business."
Whatever one might think about the direct-selling business, it's hard to argue with Nu Skin's long-term success. Plus, it was the only way the founders could think of to crack into a skin-care business dominated by huge companies with millions in advertising dollars.
Still, eight out of nine direct-marketing companies were failing 25 years ago.
"We were staring at some pretty grim realities that more startups fail than succeed," Lund said.
Direct selling, argues Lund, is the best way to sell their products. His pitch is refined with age and goes a little something like this:
Skin-care employees in traditional stores have mere seconds to convince you to come over to their counter and have to deal with distractions around you to make a sale. Direct sellers plan for 30-60 minutes to convince their clients they need what they're being sold.
It does have a downside. Direct selling is easy to get into, and easy to get out of. Of Nu Skin's 750,000 distributors worldwide, there is a core of about 35,000 "executive" distributors who are considered long-timers, says CEO Truman Hunt.
Distributors who simply leave the business can leave customers without access to products. (The Internet is helping to alleviate that problem, Hunt says, by making the company just a few clicks away.) The recession is actually helping direct marketers like Nu Skin, as a laid-off sales force looks for work and others look to supplement income. The company had its best year ever in 2008 and is on track to beat that this year, Hunt said.
Force for good
All this success has been good for Provo, too.
Leland A. Gamette has watched the company jump from warehouse to warehouse and office building to office building over his 37 years in the city's economic development department.
"They were growing at a pretty fast clip in their early years," Gamette said.
The city approached the company in the '90s about helping to anchor its downtown redevelopment. The Boyer Company was building a tower on Center Street, it said, and could Nu Skin maybe occupy a few floors?
"They literally took the entire building," Gamette said.
The company, which employees 1,200 in Provo, also occupies several other nearby buildings, using them for storefronts and research.
Provo isn't the only beneficiary of the company's largesse. Distributors and employees alike are asked to participate in the company's two charitable efforts -- Force for Good, and Nourish the Children. The former supports medical, agricultural and education efforts in dozens of countries. The latter has provided 158 million meals for impoverished children.
Even in the middle of its best year, challenging times aren't far in the rearview mirror. The company laid off 226 employees in 2006 and an undisclosed number in 2007. That year executives closed nearly half the retail stores in China, a country in which they're struggling to find the right business model.
Hunt says regulators there are either trying to get them to change their business model or grease the skids with a kickback or, say, helping a child get into college.
Reaching audiences in developing countries can also be challenging. While markets are opening up in places like China and India, the money isn't always there to support a push.
"Our product lines are not developed for third-world environments. They're not cheap," Hunt said.
There's also the pressure to please Wall Street. The company went public in 1996 and regularly gets calls from shareholders who say there should be stronger marketing efforts. There's also the constant demands of maintaining stock prices, Hunt said. Of course, going public also lends respectability because of regulatory requirements that must be met.
"We're not blowing smoke like a lot of direct-selling companies do," he said.
What are they selling?
While best known as a skin-care company, Nu Skin branched into supplements a decade after starting up and has pushed that aspect of their business hard since then. (A set of boxing gloves signed by the 1988 Olympic U.S. Boxing team hangs in Lund's office as thanks for supplements during the Games.)
The company -- with some clear exasperation -- puts a lot of effort into distancing themselves from other so-called nutraceuticals.
"We don't use magic berries from the Himalayas," says Mark Bartlett, vice president of research and development, whose previous job was cancer research with the National Institutes of Health. (He's one of more than 30 Ph.Ds and 100 scientists on staff including a review board with "a bunch of really famous, crusty old scientists.")
It's not all boring vitamins and nutrition for researchers. For example, the company found out that customers in Japan couldn't stand the smell of fish oil that was on their supplements. A few experiments later, it was found that a touch of vanilla neutralized the smell nicely. Problem solved.
Hunt, the CEO, says the company has to refresh its product line every five or six years to keep business growing.
Just about the time you're reading this, founders are pitching their newest line on a Baltic cruise with top distributors. The focus? Anti-aging.
He stopped short of giving details, saying the top distributors have earned the right to hear it first. A full product launch is coming in October.
Source: Media Herald
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