Face Value

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-By John Boley

This story is unashamedly about direct selling and the breaking of ‘glass ceilings’, the invisible barriers that women say have held them back over the years when it comes to the top jobs in industry. In the case of Mary Kay Cosmetics, that message was what created the company, after its eponymous founder Mary Kay Ash faced a situation “all too familiar to women,” according to the official bio from the US parent company. After 25 years in the direct selling business, she resigned her position as a national training director “when yet another man she had trained was promoted above” her – at twice her salary. Her response was visionary. At first, she started writing a book that would help women gain the opportunities she had been denied. But soon she realised she was creating a plan that would do much more than give advice. It formed the foundation for a new opportunity where women could develop their talents and achieve unlimited success.

Ms Ash commented: “I envisioned a company in which any woman could become just as successful as she wanted to be. The doors would be wide open to opportunity for women who were willing to pay the price and had the courage to dream.”

In 1963, with her past experience, her plan and US$5,000 in savings, Mary Kay Ash enlisted the help of her 20-year-old son, Richard, and created Beauty by Mary Kay, a company “dedicated to making life more beautiful for women. It was founded not on the competitive rule but on the Golden Rule – on praising people to success – and on the principle of placing faith first, family second and career third.” It was a company, as she said, “with heart.”

This is not the time or place to go into the politics of feminism in Australia. But there is no doubt at all that the domestic reach of Mary Kay is very substantial and Jenny Bray, Sales and Education Manager, is very upfront about the way the direct sales structure, using a network of independent consultants, works for women. “Our mission statement is ‘enriching women’s life around the world’.” Mary Kay Ash “started this business as an opportunity for women that would have no glass ceilings and in the days when Mary Kay started there were many such glass ceilings for women in business. So really this is a business for women, although we do have male consultants and we do offer a great skin care range for males too.” Jenny acknowledges, however, that “probably over 90 per cent of our independent sales force is female.”

Worldwide there are over two million independent Mary Kay Beauty Consultants selling Mary Kay skin care and colour cosmetics. Consultants buy products from the company at a wholesale price and sell to their customers at a retail price and the difference represents their commission. As a company, Mary Kay offers “up to 50 per cent commission if you are ordering your product from the company at the highest order level. That is the highest commission level within the direct sales industry; I really don’t think there is another direct sale company that offers this.” Global wholesale sales, by the way, are US$2.5 billion, so this structure obviously works.

As regards the products themselves, Jenny says Mary Kay offers a complete range of skin care and colour cosmetics to meet the needs of all skin types and ages. “Predominantly we import a lot of our product range from the US.” However, the SPF (sun protection factor) regulations within Australia are extremely stringent, she adds, and what may be an SPF 25 in America or Europe “certainly wouldn’t meet the SPF standard out here in Australia. And for that reason we offer a very high protection sunscreen that is produced locally.” The global company also has a manufacturing plant in China.

Skincare is at the heart of the Mary Kay range, explains Jenny. “We are benefit-driven, so we have customised formulas that address all ages and all skin types. We are not specific to any particular age type or skin and we offer our ‘Timewise’ collection, which is our number one seller and is a brand all of its own.” As the name implies, Timewise is formulated to be anti-ageing. “We currently have four fabulous skincare ranges that go from age-fighting to the botanically-based product range that is based more on skin type. We also have our ‘MK Men’, which is a beautiful range for men that looks after skin and gives great protection and anti-ageing benefits.” Then there is a range of products that aim to fight acne, while completing the set is “what we call our MelaCEPâ„¢ range which is aimed at brightening and anti-pigmentation.” This is increasingly popular with the Asian segment of the market. “Women of Asian descent are really looking for products that will brighten and add luminosity to their skin.” Mary Kay also offers a colour collection which is always fashion-conscious and on trend. “Again, we are benefit-driven so we have mineral based formulas in foundations, eye, cheek, and lipstick colours that really meet the needs of the consumer and we would say are right on trend.”

Jenny says the direct sales approach, with the independent (i.e. non-employed) sales force, is all about relationship building. Australia is receptive to this channel of business and is a stable market. “We are experiencing growth and I believe that our product is highly competitive amongst other direct selling players. At the heart of the sell is the ‘party plan’, a time-honoured method whereby the women get together in the comfort of a girlfriend’s home and examine, sample and compare the products in a relaxed environment without high-pressure selling techniques.

“Starting a Mary Kay business costs as little as $149 and offers a highly rewarding career path that beauty consultants can move up as fast or slowly as they choose. Many women are drawn to our career because of our company values and principles of balancing work around family and other commitments, treating others as you would want to be treated yourself, working as a team and helping others to success by sharing ideas and making others feel important and offering great customer service.”

The company does not encourage cold calling. “A successful beauty consultant learns how to book a party very early on when she becomes a consultant. Bookings really drive an independent business consultant’s growth. Word of mouth is also highly recommended.” So once the room fills with women, in a party (in the sense of ‘gathering’, rather than balloons or disco) environment, the consultant will show the products and then will book follow-up individual appointments, establishing ongoing customer contact. “This means the customer is not a one off. We coach the development of building a customer base so to allow the customer in the future to continue to buy from her Beauty Consultant – but in the way that she prefers. This might be in another party or it might be on the phone through customer service, or it might be online. We offer a full educational training programme to our consultants so they are able to use all of these skills when in the field.”

The consultant’s role can be for almost anyone. “This opportunity is open to any woman who can make a good living or wants to try to make a good living.” Jenny stresses there is a recommended retail price. “And although sometimes there is temptation for Beauty Consultants to discount, we don’t advise it and we don’t see it a great deal. As a consultant you would place a minimum $1000 order within a calendar month and you earn 50 per cent commission on that order when sold through to customers at the recommended retail price [smaller orders attract commensurately lower commission], so you have a $1000 worth of product that has at wholesale cost you $500 dollars.” Yes, a consultant could cut prices and cut that income down, but “I can tell you most of them do not do it!”

Mary Kay is treating the growth of online retailing as an opportunity rather than a problem. Customers appreciate fast response – they want the product as soon as they have ordered it – and “if we do not move forward with online ordering then that becomes an Achilles heel.” As from 2012 Mary Kay is building platforms that will be allow the consumer to go to the company’s website and ‘cart shop’ – but the goods ordered will be credited to the consultant who introduced her (or occasionally him). That way, says Jenny, “we will always retain that relationship between the consumer and the consultant which is at the base of everything we do to keep that relationship.”

Jenny regards this as a “very exciting initiative which is going to add another dimension to the business. The consultant has a number of avenues where she sells and obviously the internet is going to be one of those. We believe we offer a unique business opportunity, one which is open to anybody and really you can be as successful as you want to be. But the bottom line is that our team is also going to be able to conduct business in a manner that is very ‘now’ and ‘today’.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

December 19, 2018, 9:25 AM AEDT