Longevity can be a fleeting concept in the world of dietary supplement network marketing. Intense competition and the need for continued differentiation causes many bright-eyed MLM startups to fizzle out within the first few years of their launch. A number of leaders from some of the industry’s top network-marketing companies recently told Nutrition Business Journal that scientific product substantiation is the key to differentiation and longevity in the nutritional multi-level marketing (MLM) arena. Still, competition remains fierce and companies often feel compelled to communicate their competitive advantage beyond science to stay relevant in the MLM sales channel.
“People who are attracted to this industry are looking for some type of a new opportunity, often in the form of a product or international business venture,” said Xango President and CEO Robert Conlee. “Sadly, many have the one big bang at the beginning of their company but don’t know how to generate new opportunities with differentiation in the market. They can’t show that the company is going to be around for a long time and offer new growth opportunities.”
Companies such as Xango, MonaVie and Tahitian Noni International are all vying for the same super-fruit market share in the direct-selling world, so it’s up to each company to craft a unique message that will help set it apart from the rest. Xango communicates a message that it is the leader in the super-fruit market—which is not surprising for a company that is trying to unseat MonaVie as a leading U.S. MLM supplement-seller. “We think we started the juice competition in this industry frankly,” said Conlee of the company’s mangosteen-based product line. “We see a lot of companies thinking they can jump right in with a juice to compete. It’s much deeper than that; our seven founders probably have 120 years of experience between all of us.”
Meanwhile, MonaVie stresses the upside of a good-tasting product versus some of the competition it sees from vitamin and meal-replacement companies—an indicator that it views Herbalife and USANA as bigger competitors than its super-fruit counterparts. “The number one thing [driving sales] is the efficacy of the product, complimented by the fact that it tastes so good,” said Devin Thorpe, MonaVie’s chief financial officer. “If you’re trying to sell vitamins at USANA, vitamins don’t taste good and you get no pleasure from them. Some other competitors sell juices but people frequently tell us ours tastes better.” Thorpe also made it clear that MonaVie is focused on making the most of each of its global markets. “Mexico has not been a big success for us, but that remains Herbalife’s number one market,” he said. “We are continuing to invest and have every intention of getting our fair share of that market.”
For companies such as USANA, the point of differentiation has always been the science, with little concern for what other competitors are doing. “For years and years, supplements have had a bad image—we’re considered to be an unregulated industry,” said Tim Wood, PhD, USANA’s vice president of research and development. “We’ve taken that [criticism] head on and adopted pharmaceutical approaches in the design of our products. In the process of doing what we do, I hope we’re providing leadership within the industry and trying to raise the bar for competitors in the industry—and this is ultimately going to help differentiate them as well.”
NBJ Bottom Line
When selling a supplement at a price premium, it’s important to control the message associated with that product. Thus, MLM companies are frequently generating new narratives to pass on to distributors in order to generate new sales growth. When the industry develops a bad reputation with consumers, it can usually be tied back to overzealous marketing where companies went beyond the reasonable health claims associated with their product. Consumers are ultimately looking for value and some assurance that the products they are buying will do what they claim to do. The MLMs that see the most success in the industry understand that science has to trump marketing for long-term success.
NBJ’s next issue will include more about the latest strategies being implemented by the industry MLMs. Order a copy of the issue, which is focused exclusively on the network-marketing and healthcare practitioner channels, or subscribe to the journal via the NBJ Website.
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