CVSL
If you’ve heard of the LVMH family of brands, then you’ll understand what CVSL is all about. LVMH, in case you don’t know, stands for “Louis Vuitton Moet Hennessy”, a conglomerate of luxury brands: in their case it’s leather goods, champagne, and cognac.
The LVMH family of brands signifies an elite grouping of products. Consumers know each brand that falls within the luxury conglomerate’s umbrella will be held to the highest standards of quality. Also, the luxury brands help one another by raising consumer awareness. Consumers who know Louis Vuitton will also become aware of Moet and Hennesy, and vice versa.
Likewise, CVSL aims to bootstrap its diverse brands by associating them with one another in consumers’ minds. Only now we’re not talking luxury goods but direct selling companies.
Below, you’ll find an in-depth look at this fascinating concept in business organization, as exemplified by CVSL.
The Company
CVSL as we know it today (an umbrella structure for several direct selling companies) began its life in August of 2012 when John Rochon agreed to take over Computer Vision Systems Laboratory Corp (CVSL). His plans? To make CVSL a vehicle for acquiring direct selling companies.
Well that was three years ago and now CVSL can count among its family of brands the following direct selling names:
- Kleeneze
- Longaberger
- Project Home (formerly Tomboy Tools)
- Your Inspiration at Home
- Agel
- Paperly
- Uppercase Living
Calling it “micro enterprise”, CVSL claims direct selling can be made more profitable for shareholders by combining operational efficiencies. Mimicing the LVMH organizational structure, CVSL allows each brand to manage the details of their company: the compensation plans, management, brand identity and culture.
The strategy is simple: the more CVSL scales up, the more efficient the model becomes as companies share resources.
The CEO
More so than the individual products and the business opportunities that they offer, the CEO is extremely important in the case of CVSL. You might have already read about Your Inspiration at Home or Project Home (Tomboy Tools) on this site. Their products and compensation plans are described in detail in previous posts.
What’s important to know here is that John Rochon, CEO of CVSL, is a big deal in direct selling and in business. Not to be taken lightly, he is the former CEO of Mary Kay, Inc. He’s also an investor with Dirt Devil and RealPage Inc, and is also the founder and chairman of Richmont Holdings.
In the late 1980s, Rochon tried to take over Avon. He was at one point the largest shareholder of Avon, owning 22% of their stock*.
Rochon sees this as the perfect time to acquire direct selling companies: many of the older, more successful brands are headed by an aging set of leaders. They’re ready to cash in and retire, he hopes.
Another Important Director
CVSL has connections, among other things to ensure its vitality and longevity. They count among its directors the Honorable Kay Bailey Hutchison. She was a U.S. Senator from the State of Texas from 1993 to 2013, and was ranking Republican on the Commerce, Science, and Transportation Committee. Now, she chooses to invest her efforts with CVSL.
The Verdict
John Rochon is onto something here, with his super-strong belief in direct selling as a profitable business model. He’s tapped into the connection between decades-old social selling via the direct selling model, and today’s ubiquitous social media.
By recognizing the similarities between direct selling and using social media for selling, he views direct selling companies as having an advantage in today’s global marketplace. They were already using word-of-mouth selling techniques, long before social media came along!
And by bootstrapping brands by linking them under his CVSL umbrella, he’s increasing trust, brand recognition, and consumer connections for each company under his wing. It’s visionary, it’s fresh, and it might just work.
*Source: “Rochon Plans to Build Direct-Selling Brands on LVMH Model“. Bloomberg Business.
No comments:
Post a Comment