From the April 1996 issue of Startups

Most companies wouldn't consider Friday the 13th an auspicious day. Yet Mary Kay Cosmetics Inc. opened its doors on Friday, September 13, 1963. Today, more than 30 years later, Mary Kay Cosmetics has shown that Friday the 13th can be a lucky day to start a business, by becoming the largest direct selling skin care company in the nation, boasting more than 400,000 representatives worldwide, who generate annual retail sales in excess of $2 billion.

Mary Kay Ash, founder and chairman emeritus, never intended to start a cosmetics business. When she retired in 1963, after a 25-year career in the direct selling industry, her goal was to combine her experiences into a guidebook for career women.

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

She then decided to use this plan to begin her own direct sales company. "To start a direct sales company, first of all you need a product that people like so much that they will come back to you for it," says Mary Kay. "Cosmetics were something women could believe in. That's important because, when you're trying to sell a product, people can tell if you're not really sold on it, yourself."

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

Mary Kay and her husband took their lives' savings of $5,000, found a cosmetics company to manufacture products from their formulas and rented a 500-square-foot storefront. Mary Kay wrote a five-page manual to guide her 'beauty consultants'. "They were really all friends of mine who didn't have the heart 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 for grief," says Mary Kay. "And so, despite my shock, I decided to open the business as planned. Starting the company had been a dream and my idea, but I had never imagined that I would run it alone. I knew that I didn't have the needed administrative skills; and yet, at this point, all the merchandise, bottles and labels were useless if the company folded. I had to go on."

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

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

"For the first, second and third years, I drew no salary at all," says Mary Kay. "Every penny went back into the business and sometimes we worked until two or three o'clock in the morning. I did everything from packing orders to sweeping the floors, to writing the bulletins to teaching the consultants."

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

Keys to Success

What's the secret to Mary Kay's success? What made her company skyrocket so quickly? Judging from Mary Kay's writings on the subject, it comes down to three things: The way Mary Kay consultants treat their customers; the way the Mary Kay Cosmetics company treats the people who sell its products; and the way Mary Kay and her fleet of pink Cadillacs have captivated the public eye for more than three decades.

Mary Kay believes service is the only way to sell. She tells all her consultants the same thing: "For good value and exceptional service, customers will reward you with repeat business and refer additional customers to you. But they will avoid poor products and inferior service like the plague."

From the beginning, her selling strategies have been based on this service philosophy. So much so that, rather than having her beauty consultants simply sell the cosmetics door-to-door, Mary Kay decided they would conduct skin care classes in people's homes.

"I didn't conduct marketing surveys to find out what other women thought of the cosmetics they bought over the counter at their local department stores. I didn't have the money for such research," she explains. "But I did know I felt embarrassed 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 had done or how to repeat it. I thought it would be wonderful for a skin care expert to come to my house and, in the privacy of my home, show me the best look for my face. Then, if she instructed me to 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 mind experimenting with makeup when she was with a few close girlfriends." And a woman who can apply her own makeup in a way 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 her company is able to compete with department stores.

"When was the last time someone from Estée Lauder called to ask how you like what you purchased from them?" she asks. "Never! When you buy from Mary Kay, your consultant becomes your consultant for life. She'll call after two weeks and ask how you like the things you've bought."

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

"Before our doors opened for business, I vowed that no one associated with my company would ever be subjected to unfair treatment or unjust management," says Mary Kay. "Since then, 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 office every day worthwhile."

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

She recalls this story: "I once overheard one of our women say, 'When I first began my Mary Kay career, I was terrified to speak in front of even a small group of people. I never though I'd make it through my first skin care class. I was so shy, I couldn't lead in silent prayer!' A while later, the same woman repeated the same remark-on a stage in front of eight thousand people. This time, she was radiant and bubbled with enthusiasm. She told the audience that anything was possible if they committed themselves to doing it."

To this end, her company is set up so that all consultants have directors who mentor and encourage them. It works like this. The consultant who brings a new person into the company can receive a commission (paid by the company) on the recruit's wholesale purchases, the established consultant is naturally inclined to watch over her recruit. In time, a strong bond develops between the two women, enabling success for both.

Recognition within the organization is a powerful motivator, but recognition from Mary Kay, herself, is what her salespeople crave most. She personally crowns four Queens of Seminar-women who have excelled at sales or recruiting-at her big, once-a-year sales convention in Dallas. She kisses them and puts roses in their laps.

"The desire for recognition is a powerful motivator," says Mary Kay. "Anyone who has attended a Mary Kay seminar knows we recognize our people's achievements with beautiful gifts and tons of verbal appreciation. Exciting prizes are significant symbols of esteem; I believe both words and things are important."

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

"We try to give what I call Cinderella gifts," says Mary Kay. "Because the typical woman is too practical to buy one of these luxuries for herself. I know some companies offer cash bonuses as incentives, but I don't think money has the same heartfelt effect on women. If we awarded a cash bonus, a woman would probably use it to pay her utility bills, or replace her washing machine. Once she spends the money, she doesn't think about it again. But every time she sees that diamond ring on her finger, she remembers her well-deserved moment of glory."

Some gifts not only make a woman feel like a queen, but also help 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 worth of Mary Kay's "trophies on wheels" on the road.