The World of Direct Selling

Guest columnist Mike Gamaggio is eBusiness & Mobile Communications Manager at Amway Europe, overseeing company’s strategies and executions of digital programs in 29 European markets. Based in Amway Europe’s HQ in Puchheim, Germany, he works closely with the global teams and marketing communication business units across Europe. Mike has a Master’s Degree in International Business and Culture Studies from Passau University in Germany.

Mike had a wonderful presentation on the “Future Trends in Direct Selling” at the WFDSA Congress in Istanbul in October 2011. Please click here if you wish to take a look at that presentation.

Guest Post by Mike Gamaggio
It’s the Digital, Guys!

Every corporation and company is socializing, Facebook brand pages are popping out by the minute and more and more people spend an increasing amount of time on social media. Recently, Google+ also enabled company profiles with social evangelists demanding already a different communication strategy or Google+ than Facebook brand pages.

Yes, it’s booming and we see so many great ideas from companies embracing social media into the communication mix. Digitalization is on the move throughout our enterprises.

What is “digital”? Is it just social media… or Web? How does mobile fit into all this? Let’s take a closer look.

According to Wikipedia, digital strategy is “the process of specifying an organization’s vision, goals, opportunities and initiatives in order to maximize the business benefits digital investments and efforts provide to the organization”. These can range from an enterprise focus, which considers the broader opportunities and risks that digital potentially creates (e.g., changes in the publishing industry) and often includes customer intelligence, collaboration, new product/market exploration, sales and service optimization, enterprise technology architectures and processes, innovation and governance; to more marketing and customer-focused efforts such as websites, mobile, eCommerce, social, site and search engine optimization, and advertising.

So “digital” comprises the areas of Web, social media and mobile and the digital strategy leverages these into tactical initiatives.

Social Media: Traffic, “Likes” and page impressions is everything!

Really? Is setting up a social media communication plan and launching a corporate or brand pages on Facebook or on Google+ and collecting as many fans and likes as possible, enough? More fans and increased impressions, is that it? Every fan has an average of 150 friends, so their “Likes” of a post will be seen exponentially. The question is whether this, for a marketer in an international corporation, will satisfy my needs as a user/fan and qualifies as “objective achieved”? It’s great if your page impressions increase exponentially, but there has to be something in it for the user. Something that allows qualitative growth. In other words, social media is an effective tool to engage your audience, to have conversations and inform them about news, promotions, anything you think of… It should also, however, expand to other dimensions.

Audiences need functionalities, which work within the social media. For a start, you can use social media combined with a click to action to drive traffic to your sites. This is an activity described as “fish in the ocean and bring into your harbor” using social media as a traffic generator towards my regular websites.

Make more with “Social Apps”

Rather than using social media as a collector to pull visitors into my website, I want to bring my own functionality to the social media sites. With my own “Facebook App”, I can bring my business logic and business processes into a corporate Facebook page or into individual Facebook pages of independent distributors. Visitors don’t have to navigate away to their page to complete a transaction (call to action). All of that can be done within Facebook. Viralization happens much faster and easier within social media than invoking numerous websites to spread the word.

For eCommerce transactions in the above context of bringing business logic into Facebook, we use the term “social commerce”. There is no clear and agreed upon definition of social commerce. However, the idea that it should be done in a non-intrusive way is generally true. For example, a Facebook App that asks you for permission and will connect to all your friends in Facebook with the shopping functionalities inherent to the App, might be perceived as too aggressive and intrusive.

Mobile rocks!

As for mobile, the incredible growth we experienced in the recent years challenges what we thought was possible. Mobile has changed the way we communicate. Next it will change how we do business and is already doing so.  Therefore, to ensure smooth development, it is of utmost importance that this be properly planned.  However, there is no one all-encompassing App that can do everything. Take for example a company in direct selling or multi-level marketing. It will need to put the target audience of its engagement in the focus. This might be distributors, who are business builders and who require a powerful business center App to manage their business. They need to be able to extract business reports, register new distributors, see who is currently in their geographical vicinity, see who has birthday and so on and so forth.

For a well-executed mobile presence, the concept of mobile needs to be properly defined and embedded into the overall digital strategy. Mobile means smart phones and tablets, but also a regular SMS-capable mobile phone. The secret of what makes the best solution is in the mix.

First, you must consider the basics of services available via SMS. These are: To check your current status and balance, release a payment, be notified about an incoming order from your customer, among others.

Then, gradually offer specific features on smarter phones via a mobile-friendly website (copy of your website and content, but “optimized” for mobile).

Next, allow some device platforms to create specific Apps. Always keep a focus on your audience: If it’s a business, you will want a business-relevant App. You would allow the brands, products or services directed at your customers to also become accessible through dedicated Apps.

Note that once again, functionality is the key. There’s no point in creating an App that many install and use one time. This would be for example, a “Content App”. It’s useless if it’s not part of a publications mission.

Useful mobile Apps are those that engage with you/your customers and provide you with recommendations and personalization. Product recommenders fall into such categories.  They work like this: Allow the customer to answer a couple of simple questions and let the tool advice about suitable products. Add the shopping capabilities to check out the order on mobile or via the Web. Recommend products from Mobile to a friend on Facebook and allow him/her to complete the order on social media. That is channel conversion.  From now on, the way you do business does not depend on your geographical location.

Web is gone and old fashioned… Oh yeah?

Let’s take a step back and reflect once again that social media and mobile are not everything and all about digital. The basic Web remains at the core of all. Users don’t think in channels, they think in individual user journeys.

Today, a Web visitor might come to your company’s digital presence via social media, tomorrow he might come via the Web and the day after via mobile. Or he might want to toggle between the channels during the user journey (completing a business process e.g. shopping). He adds products to his basket on social media, chooses the payment type on Web and checks out/completes the order on his mobile phone, because he happens to be on the move at that moment.

This channel flexibility is exactly what people expect nowadays. There is no Web team, mobile team or social media team! There is one digital team offering these solutions to your audience … Well, at least there should be.

The center of it all is one smart core system containing the business logic. This will avoid business process duplication (avoid building competing systems on Web, mobile and social media) on multiple platforms. One system has the lead and enable for the others to leverage and connect into given business processes.

The Digital Framework

 

At Amway Europe we are trying to put the above into action by pursuing a digital framework that circles around the “Core Web” platform. This platform contains all eCommerce capabilities and supports all business processes required by Amway (Shopping/Ordering/Cancellation, Account Maintenance, Online Sponsoring etc.). Around this core we allow for all digital activities to patch in. The “Core Web” provides all channel related solutions (Web, mobile and offers interfaces to social media) and thus avoids duplication of business processes per channel. This is standardized and cost efficient.

We always call direct selling a “people business”. Being a people business, demographic and socio-economic factors play a vital role in the growths of indvidual companies and of the industry as a whole.

Few facts to share about Turkey:

Total Population

Turkey’s population as of December 2011 is 75 million. Turkey has the 3rd largest population in Europe, after Russia (139 million) and Germany (81 mllion), and ranks the 17th in the world. According to forecasts, Turkey is expected to overtake Germany by 2020 to become the second most populated country in Europe.

This drives economic growth, increases consumer demand and expands the labor market.

Age of  Population 

With a median age of 29, Turkey has the youngest population in Western Europe. 27% of the people are below the age of 15. As a comparison, this group represents 20% of the population in the US, 17% in the UK, and 13% in Germany.

This shows that the demand for goods and services will further grow in the future as well as the demand for job opportunities.

Urbanization

There has been strong wave of urbanization in the country for decades. As a result, more than ¾ the population live in cities and towns now. Euromonitor predicts that by the year 2020, three of the ten largest European cities will be in Turkey. In fact, Istanbul alone with its 13.5 million inhabitants is already bigger than the European countries like Portugal, Greece, Belgium, Hungary or Sweden.

A high rate in urbanization leads to higher unemployment in urban areas. This is simply because the rate of expansion in job opportunites in cities seldom cope with the rate of urbanization. Urbanization facilitates finding customers and prospective direct sellers.

Unemployment

Yes, unemployment has been a significant problem in Turkey since its establishment. The current rate of urban unemployment is around 12%. This rate is as high as 17% among females in urban areas and also 17% among the 14-25 age group.

Attitude Towards Self-Employment

According to GfK’ study sponsored by Amway Europe in late 2011, of the 1,487 men and women surveyed, 65% said they had positive attitudes towards self-employment. Maybe more importantly, this is even higher among those who already had full-time jobs (76%) showing this attitude did not merely stem from desperation.

The numbers speak for themselves… Turkey is calling!

Ozgul Cingil was born in Nevsehir, a small town in central Turkey. She says her window to the rest of the world was her grandfather’s movie theater in the town as there was no TV at the time. She graduated from a teacher training high school but could not practice her profession due to the political climate in Turkey those days. She then, marries and gives birth to her daughter. At a period when she was bored of staying at home, she gets introduced to direct selling at a bazaar in 1993. Ozgul Cingil is now the 3rd most successful leader in Oriflame’s organization worldwide.

Let’s start from the very beginning. How were you introduced to direct selling and how was your first feeling at that time?

My husband was in textiles business at the time. I went to a bazaar to sell few of his products and also to spend some time. For the first time, I saw Oriflame products there. I was impressed with their Swedish origin. I registered to be able to buy them for my own use. For about a year so, I used the products and also sold them to the people around me. And I started working at an office full time.

How did you decide to consider this as a “business”?

At the office I was working, there was a lady. When I heard she was leaving the company, I went to her and asked why. She said she was at the “Director” level at Oriflame and was earning there more than what she was at this company. She briefly explained the compensation plan to me. Until then, I had no idea about the plan as I had not attended their meetings. I was impressed with what I heard and I decided to give a try.

In direct selling, some say that it is more advantageous to be among the first in an organization and be at “the top”. So, when did you join Oriflame and and how would you comment on this claim?

I joined in 1993 and decided working full time in 1994. To succeed in direct selling, the time you join does not count. What counts is the time you decide. There are many consultants in my downline who started around the same time with me. They still earn pocket money and their titles are merely “Consultant”. On the other hand, we have Zeynep Soylu for instance, who joined the organization only three years ago. She is now a “Senior Diamond Director” and ranks the 11th among the most successful leaders in Turkey. So, the important things here are working hard, setting targets and willingness. Only these can make you succeed.

What is your formula for success in direct selling? What did you do achieve?

You need to be willing and working very very hard. You need have goals and dreams. I have always had my goals and dreams.

First, you have to sell and recruit. You must know your products well, promote them and use them personally.

Secondly, recruitment is vital in our business but more important than that is to train the recruits, to organize meetings, to set their targets and to follow them up. Recruiting people is easy. Everybody can recruit lots of people but this does not lead to success. What leads to success is training them.

And thirdly, one of my most important charactestics is being a positive person and emphasizing this characteristic when choosing whom to work with. I refrain from working with negative people. And I am persistent, I never give up.

When you look back, is there anything that you say, “I wish I did it differently.”?

I wish I attended the meetings from the day I joined and did not miss that one year.

What you recommend to the beginners? What should and shouldn’t they do?

They should get to know their sponsors and share their personal dreams with them. They should participate in all meetings, use the products, have those around them use as well, and share this fantastic business opportunity with everybody that they know.

One last recommendation from me would be that they should stay away from negative thoughts, and should never give up on their goals and dreams.

What would you say to those who doubt making big money in this business is possible?

I always say one thing during my meetings: Direct selling is for smart people. You start on your own just like a small business owner. When you begin recruiting others, you begin opening your branches and in time, you have a business with thousands of branches and shops.

When I first started, we had a modest home and a car. With direct selling, I had the opportunity of having my dream home and dream car. I had the opportunity to provide the best education to my daughter. I travelled all around the world. Few days after this interview, I will be leaving for Argentina and Brazil for a two-week trip.

What about your goals for the future? What do you plan to do next?

I rank at the 1st place in Turkey in our organization and at the 3rd place worldwide. There are over 3.5 million Oriflame Consultants in 63 countries. My next goal is to be “Senior Executive Director” at Oriflame.

But if you are asking me what really makes me happy is, I would say watching my downline Consultants go “Director” and earn enough to meet their needs, and to buy their homes and cars.

Thank you so much for your time. Would you like to add anything else?

I have always believed that God gives a person three chances. For me, this is one of them.

It is extremely important in this business to start with the right company. Along with your dreams and your goals, you also need to have a company that will be with you, support you and be willing to make you earn more.

Thank you for this interview.