Kleeneze: Growth Times 10
by Barbara Seale at http://directsellingnews.com
- Founded: 1923
- Headquarters: Accrington, Lancashire, England
- Executive: Managing Director Jamie Stewart
- Products: Household, healthcare and beauty products
What would it take to grow your company to 10 times its size? That’s the challenge British direct seller Kleeneze has given itself. And it aims to do it in the next 10 years.
Inspired by the Direct Selling News Global 100, executives set an aggressive 2023 sales target. They call it the Billion Dollar Vision.
Kleeneze (pronounced Clean Easy) is no new kid on the block. In one form or another, it has been around for 90 years and is widely known in England. Even Winston Churchill was a regular Kleeneze customer. And like most mature companies, it has had its ups and downs. Managing Director Jamie Stewart believes that growing to 10 times its size is possible for Kleeneze, and he emphasizes that both technological and cultural changes are must-haves to fuel the growth.
In the U.K., the Republic of Ireland, Germany and the Netherlands, Kleeneze is known for its home maintenance, cookware and health and beauty products. It offers 1,500 products ranging from cookware to car wax. The diverse product line grew gradually from a collection of high-quality wire brushes.
Kleeneze founder Harry Crook went to America to find his fortune by working for the Fuller Brush Co. Crook paid close attention, learning how to make wire brushes that could be sold door to door. He brought what he learned back to England and in 1923 established the Kleeneze Brush Co. In just five years his high-quality brushes were so in demand that he had opened more than 200 branches worldwide. It just made sense to offer a line of polishes, too. And so the expansion began.
Modify the Model
The products were successfully sold door to door until the 1960s. By then sales had begun to lag, and the company hired a management consultant to boost results. The consultant, Richard Berry—who went on to become Managing Director and then later Director General of the DSA—had spent some time with Amway and saw the potential in Kleeneze. He convinced circa 800 employee-salespeople to become self-employed, though most continued to sell products without recruiting a network. But the culture change had begun, and a new business model was born. Kleeneze became the first U.K. direct selling company to use a multi-level compensation plan. In the 1980s the company introduced product catalogs. Instead of knocking on the customer’s door, the salespeople simply left the catalog and returned a few days later to collect orders. That method took a while to gain momentum, but it caught on. Business-minded salespersons found that the new method made it easy to recruit others. Their message: no product knowledge or sales skills needed.
That catalog sales method still continues, but with a few twists. One of the biggest: Kleeneze customers can now order online as well as through their printed catalog, and distributors get a commission on every sale—the company won’t deal directly with customers; all are passed to a distributor, which is something unusual in England.
The change sounds easy, but it wasn’t clean. Ten years ago with revenues declining, Kleeneze management changed its compensation plan, effectively reducing distributors’ income. The new plan wasn’t well received. Many top distributors had built their lifestyles on the income they had built over many years, and they lost confidence in the company. The turnaround the company hoped for didn’t happen.
In 2006 Kleeneze was acquired by retailer/distributor Findel PLC. Eventually, it became Findel’s most successful acquisition. Kleeneze’s new Deputy Managing Director was Jamie Stewart, a man who thrives on change. It was exactly what the struggling company needed. After he helped Kleeneze move to its new location so that it could take advantage of the parent company’s distribution and physical facilities, he was named Managing Director.
In 2006 Kleeneze was acquired by retailer/distributor Findel PLC. Eventually it became Findel’s most successful acquisition.
Although Stewart’s background was in more traditional business models, during college he briefly was a distributor for a network marketing company that sold home and auto security systems. It was a short introduction to the direct sales industry, but it provided a platform for when he began to lead Kleeneze, and he immediately liked the business model.
“I found it quite easy to get into,” he recalls. “I was already learning from people such as Stephen Covey and Anthony Robbins, so I was very comfortable with the personal-development element of it. Recognition was easy, too. The mail order and product side was what I had to learn.”
He launched himself into the company, even “walking the beat” with some of the company’s distributors to learn the business from the ground up. With those insights, he started making improvements.
“We fixed a lot of things,” he recalls. “We improved the quality of the products, cleaned up the messy distribution system, and put sales incentives back the way they used to be.”
He also became active in England’s Direct Selling Association, which Kleeneze had helped to found years before.
“I was initially reluctant,” he says. “I had too much to do turning the company around, so it took three or four requests before I got involved. Being from outside the industry, I looked at every other company as the competition. But when I joined DSA, I learned that we’re more like sister companies. I wish I had gotten involved sooner. The openness that exists in the U.K. between general managers of DSA member companies surprised me.” He became the group’s chairman in June 2010.
Along with learning from fellow DSA members, Stewart has studied direct sellers in the United States to gain knowledge from their business practices. He says that a big difference in direct sellers in the two countries is that U.S. companies are much more tech savvy. But he aims to make up the difference.
He also aims to offer another model that he learned from fellow direct sellers: the party plan.
Early in 2012 Kleeneze launched a pilot of ezeparty in the U.K. Distributors can use that option, as well as their usual catalog business, or they can combine the two. Ezeparty gatherings initially focused on the ezecook cookware product line but expanded to a collection of spa products that include a wide assortment of premium skincare products and cosmetics. They let guests skip expensive spas and be pampered at home. Ezeparty helped a small group of Kleeneze distributors in the U.K. and then Ireland both sell products and recruit about 1,000 new distributors during 2012, but it represents a cultural revolution for distributorships who previously relied on leaving catalogs at customer doors. Stewart says that Kleeneze will refine the concept before it expands further into Europe.
Stewart doesn’t understate the work involved with starting the new effort.
He notes that a party plan business requires a depth of product knowledge not required of distributors who drop off catalogs. “Everyone knows Kleeneze in the U.K., and it’s a branding challenge for existing distributors,” Stewart says. “But for new people, the products are fantastic. They’re starting to pull people through. Spa and cooking products have always been a strong category, and they’re capturing people’s interest.”
Among the key new products is the company’s anti-aging line. Stewart provides personal testimonials on Facebook and at events on how they’ve helped his crow’s feet.
“I show before and after pictures,” he says candidly. “It’s easy to do. It’s been interesting to get male distributors using it and talking about it.”
He says that ezeparty and the products it presents will fuel the company’s growth goals, but the big growth gorilla will be technology. Kleeneze already has implemented several groundbreaking initiatives. It was the first direct seller in England to move to 100 percent online registration for new signups; the first to introduce personal websites; the first to introduce free personal websites to every distributor; and one of the first to offer e-commerce websites to all distributors at no extra charge. Already some 99 percent of sales are online, entered either by distributors or directly by consumers. And people searching for income opportunities often find Kleeneze online. In fact, the Kleeneze website has a heavy focus on its business opportunity.
“About 80 percent of the way people come across our business is online—either because they’re searching for us or someone has recommended Kleeneze,” Stewart says. “That’s why we’re on social media a lot and encourage distributors to be involved in social media to develop relationships.”
New Kleeneze recruits have often responded to an advertisement placed by one of the company’s 11,000 distributorships—a common way business builders grow their teams. Stewart says that the income opportunity is attractive. People can generate an income and make a profit in their first week on the job. Go-getters can earn a full-time income on their own, with no team. The downside, of course, is that without a team, the distributorship’s personal sales can’t translate into recurring residual income.
“We have people who sell over £100,000 of product a year with no team. It’s not sustainable if you break a leg,” Stewart says, “but people can earn £1,000 their first month. It’s such a simple thing to do that it’s very duplicable. It’s easy to get involved and to get others involved, but keeping the momentum going is work. It’s like joining the gym in January. People join with the best intentions, but aren’t prepared for the consistent efforts required in order to gain the results they desire.”
No Fear of Failure
But Kleeneze keeps tweaking its business to attract new distributorships and increase sales, and it isn’t afraid to take risks and learn from failures. For example, a couple of years ago it tested letting people join for free. That experiment created a 30 percent growth in distributors in just three months, but many joined and then did nothing. However, this starter option is now a key recruiting tool for distributors.
“Typically 80 percent of new distributors place an order, but that number is much less when people join for free,” Stewart reports. “It was a learning curve.”
The most recent and much more successful program lets new distributors split their enrollment fee into three payments. “This year what has made a difference is that the first payment is £49.99, with three more payments of £45 each over the next three months,” he explains. “It has had a massive impact. We give distributors a £750 credit facility to order products from us before they receive payment from their customers. As they collect payments, they pay us back. It’s a business model that works. The barrier was the cost of joining.”
Technological leaps are also making a difference, just as Stewart predicted. Kleeneze recently gave distributors the ability to take credit card payments with their smartphones, using mobile web developed in-house, and it is currently testing a third-party card reader for smartphones. It’s only the most recent innovation that will help Kleeneze reach its big Billion Dollar Vision.
“We’re developing a digital strategy to grow the business and make it easy, slick and sexy,” Stewart says. “We want it to be easy to generate sales. That will be the key. Direct selling in England has been slow to take advantage of technology. The innovation is happening in the States, so we’re learning through Success University, the DSA conference and Direct Selling News online.”
Its Billion Dollar Vision requires Kleeneze to tackle innovation in an unprecedented way. It’s already paying off. Since the company introduced e-commerce, for example, they’ve seen a huge rise in Gen Y distributorships.
“If you start thinking about making the company 10 times bigger, you have to start thinking about doing things differently, not just working harder,” Stewart notes. “In 2023 I will be 50 and Kleeneze will be 100 years old. Our top distributors have always told me we’re going to make this a billion-pound company. I can see the potential, and we’re starting to see now that it’s achievable.”
Cleaning Up the Ravages of Cancer
Distributors gathered in Miami in 2012 for a Kleeneze convention that included training, awards and support of charitable causes.
One in three people gets cancer, and Kleeneze wants to do what it can to help. That’s why its official charity is Macmillan Cancer Support.
The organization provides the expert care and emotional support that makes a difference to patients who battle cancer, as well as to caregivers and family members.
Kleeneze has contributed tens of thousands of pounds to the charity through multiple fundraisers. “Coffee mornings” are Macmillan’s biggest fundraisers, helping it raise more than £10 million in 2012 alone. Kleeneze gets in on the party in its offices and in distributor homes, where a cuppa joe and a pastry inspire monetary donations that add up.
The corporate headquarters contributes “sample products” to a sample sale, and all proceeds go to Macmillan. And distributors hold sponsored bike rides, loose-change donations, and other events. But most donations come from sales of a selected product. Kleeneze donates part of the sale to Macmillan.
In 2011 the company donated approximately £32,000 to Macmillan Cancer Support.