Makeup Mogul The keys to success: How Mary Kay's company became the Cadillac of cosmetics

Most companies wouldn't consider Friday the 13th anauspicious day. Yet Mary Kay Cosmetics Inc. opened its doors onFriday, September 13, 1963. Today, more than 30 years later, MaryKay Cosmetics has shown that Friday the 13th can be a lucky day tostart a business, by becoming the largest direct selling skin carecompany in the nation, boasting more than 400,000 representativesworldwide, who generate annual retail sales in excess of $2billion.

Mary Kay Ash, founder and chairman emeritus, never intended tostart a cosmetics business. When she retired in 1963, after a25-year career in the direct selling industry, her goal was tocombine her experiences into a guidebook for career women.

"I didn't know how to write a book," explains MaryKay, "so I just took a legal-size pad and began to listeverything good the two companies (Stanley Home Products and WorldGifts) I had worked for had done. Then I took a second legal padand began listing the problems-and there were many things Ithought could have been done better. One day, it occurred to me:'If you're so brilliant, what would you have done?' SoI began to write out my answers to these problems. When I read thewhole thing in preparation to begin the book, I thought to myself,'My goodness, I've put a marketing plan onpaper!'"

She then decided to use this plan to begin her own direct salescompany. "To start a direct sales company, first of all youneed a product that people like so much that they will come back toyou for it," says Mary Kay. "Cosmetics were somethingwomen could believe in. That's important because, whenyou're trying to sell a product, people can tell if you'renot really sold on it, yourself."

And Mary Kay had a product she already believed in. Since theearly 50s, she had used a line of skin care products introduced toher by a former Stanley Products hostess. The woman sold theproducts, developed by her father, from her homebased beauty shopuntil her death in 1961. Mary Kay decided to buy the formulas fromthe woman's heirs and use them as the basis for her ownline.

Mary Kay and her husband took their lives' savings of$5,000, found a cosmetics company to manufacture products fromtheir formulas and rented a 500-square-foot storefront. Mary Kaywrote a five-page manual to guide her 'beauty consultants'."They were really all friends of mine who didn't have theheart to say no!" she says.

Then tragedy struck: Almost a month before their opening date,Mary Kay's husband died of a heart attack.

"I believe that work is often the best antidote forgrief," says Mary Kay. "And so, despite my shock, Idecided to open the business as planned. Starting the company hadbeen a dream and my idea, but I had never imagined that I would runit alone. I knew that I didn't have the needed administrativeskills; and yet, at this point, all the merchandise, bottles andlabels were useless if the company folded. I had to goon."

And she did, with the help of her 20-year-old son Richard, whomshe took on as a business partner. He had taken only two years'worth of marketing classes at North Texas University, but accordingto Mary Kay, at least that was something to go on.

Starting with a total of just nine products, including a basicskin care set, rouge, lip and eye palettes, mascara and eyebrowpencils, Mary Kay opened for business. She fit her company'sentire inventory onto a small shelving unit on her first day.

"For the first, second and third years, I drew no salary atall," says Mary Kay. "Every penny went back into thebusiness and sometimes we worked until two or three o'clock inthe morning. I did everything from packing orders to sweeping thefloors, to writing the bulletins to teaching theconsultants."

Eventually, their hard work paid off. After one year inbusiness, they moved the company into a five thousand square-footheadquarters. First-year sales reached $198,000, and by the end ofthe second year, sales totaled $800,000.

Keys to Success

What's the secret to Mary Kay's success? What made hercompany skyrocket so quickly? Judging from Mary Kay's writingson the subject, it comes down to three things: The way Mary Kayconsultants treat their customers; the way the Mary Kay Cosmeticscompany treats the people who sell its products; and the way MaryKay and her fleet of pink Cadillacs have captivated the public eyefor more than three decades.

Mary Kay believes service is the only way to sell. She tells allher consultants the same thing: "For good value andexceptional service, customers will reward you with repeat businessand refer additional customers to you. But they will avoid poorproducts and inferior service like the plague."

From the beginning, her selling strategies have been based onthis service philosophy. So much so that, rather than having herbeauty consultants simply sell the cosmetics door-to-door, Mary Kaydecided they would conduct skin care classes in people'shomes.

"I didn't conduct marketing surveys to find out whatother women thought of the cosmetics they bought over the counterat their local department stores. I didn't have the money forsuch research," she explains. "But I did know I feltembarrassed to try on makeup in a store in front of other shoppers.And when I did, no one bothered to teach me how to apply it myself.Sure, the store cosmeticians could make you look Elizabeth Taylor,but once they were finished you had no earthly idea what they haddone or how to repeat it. I thought it would be wonderful for askin care expert to come to my house and, in the privacy of myhome, show me the best look for my face. Then, if she instructed meto do it myself, I would be able to do it tomorrow and every day.Right from the start, instinct told me a woman wouldn't mindexperimenting with makeup when she was with a few closegirlfriends." And a woman who can apply her own makeup in away that flatters her is more likely to use it every day.

Golden Girl

Mary Kay notes that great service is one of the main reasons hercompany is able to compete with department stores.

"When was the last time someone from Estée Laudercalled to ask how you like what you purchased from them?" sheasks. "Never! When you buy from Mary Kay, your consultantbecomes your consultant for life. She'll call after two weeksand ask how you like the things you've bought."

Mary Kay believes the Golden Rule (Do unto others as you wouldhave them do unto you) holds an important place in business, and itis the driving principle behind her method of doing business.

"Before our doors opened for business, I vowed that no oneassociated with my company would ever be subjected to unfairtreatment or unjust management," says Mary Kay. "Sincethen, when a solution is needed for a people problem, I ask myself:'If I were this person how would I want to be treated?'Personally, working this way is what makes coming to the officeevery day worthwhile."

Mary Kay believes it is possible to praise a person to success;enough encouragement and loving attention, she insists, cantransform even the shiest women into super salespeople.

She recalls this story: "I once overheard one of our womensay, 'When I first began my Mary Kay career, I was terrified tospeak in front of even a small group of people. I never thoughI'd make it through my first skin care class. I was so shy, Icouldn't lead in silent prayer!' A while later, the samewoman repeated the same remark-on a stage in front of eightthousand people. This time, she was radiant and bubbled withenthusiasm. She told the audience that anything was possible ifthey committed themselves to doing it."

To this end, her company is set up so that all consultants havedirectors who mentor and encourage them. It works like this. Theconsultant who brings a new person into the company can receive acommission (paid by the company) on the recruit's wholesalepurchases, the established consultant is naturally inclined towatch over her recruit. In time, a strong bond develops between thetwo women, enabling success for both.

Recognition within the organization is a powerful motivator, butrecognition from Mary Kay, herself, is what her salespeople cravemost. She personally crowns four Queens of Seminar-women whohave excelled at sales or recruiting-at her big, once-a-yearsales convention in Dallas. She kisses them and puts roses in theirlaps.

"The desire for recognition is a powerful motivator,"says Mary Kay. "Anyone who has attended a Mary Kay seminarknows we recognize our people's achievements with beautifulgifts and tons of verbal appreciation. Exciting prizes aresignificant symbols of esteem; I believe both words and things areimportant."

It is a system that works. Indeed, Mary Kay has created morethan 75 "millionaires" (women who have earned commissionsof $1 million or more over the course of their careers). Thecompany is world-renowned for its incentive program.

"We try to give what I call Cinderella gifts," saysMary Kay. "Because the typical woman is too practical to buyone of these luxuries for herself. I know some companies offer cashbonuses as incentives, but I don't think money has the sameheartfelt effect on women. If we awarded a cash bonus, a womanwould probably use it to pay her utility bills, or replace herwashing machine. Once she spends the money, she doesn't thinkabout it again. But every time she sees that diamond ring on herfinger, she remembers her well-deserved moment of glory."

Some gifts not only make a woman feel like a queen, but alsohelp promote the company-like the now-famous pink Cadillac.Every time a pink Cadillac goes by, people automatically think,"Mary Kay!" Currently, there are over $115 million worthof Mary Kay's "trophies on wheels" on the road.