The Wave is Upon Us: Big Changes for Direct Selling
Guest author Alan Luce is the Senior Managing Principal at Strategic Choice Partners. He is a veteran direct seller who held senior management executive roles at major companies like Tupperware and PartyLite.
Today, he’s a consultant to more than a hundred direct selling companies, from start-ups to major powers. An expert in compensation plans, startup strategies and sales management programs, Alan sits on the boards of numerous direct sales companies. His many honors include induction into the U.S. Direct Selling Association Hall of Fame and the Direct Selling Education Foundation’s Circle of Honor.
Guest Post by Alan Luce
The Wave is Upon Us: Big Changes for Direct Selling
Most eyes in the direct sales industry are focused on the current unsettled regulatory climate in the US. What will our new “rules of the road” be? Must commission payments only be payable upon retail sales to unaffiliated end user customers? Can any portion of personal consumption be counted as commissionable volume?
These are serious questions. But they’re not the most important ones direct selling executives should be asking. In fact, the real wave of change impacting the industry is passing by largely unnoticed.
The most important questions over the next 5-10 years will relate to how direct selling will:
1- Attract customers, and…
2- Recruit and retain sales people, and…
3- Remain relevant in a world increasingly dominated by excellent online vendors who offer outstanding service, 24/7.
Think about this for a moment: As direct sellers we want to sell to customers and recruit sales people from the same population that can order from Amazon Prime and get almost any type of item in 24 to 36 hours. They can do this at any hour of the day or night. The customer service contact information is plastered all over the documents that come with the product and the corporate website. If they have a question, or their order comes damaged or incorrect, they can contact Amazon at any hour of the day or night and interact with a live person to receive quick and easy relief. Return and replacement policies are generously slanted in favor of the customer and absolutely hassle free.
And, it’s not just Amazon. You can add Zappos, Untuckit and a host of other on line merchants who offer constant availability with quick and easy complaint resolution. This is the environment in which direct sales must compete!
Now contrast that experience with the typical direct selling customer experience. The customer buys a product through an independent sales person. The product comes in about 5-8 days, compared to 24-36 hours for Amazon. Unfortunately, the customer ordered a blue product and received a red one instead. She looks through the packing slip to find the company’s contact information. Failing to find it there she looks for her purchase receipt and can’t find it. At 10 p.m. she goes online to find some way to find someone at the company to help her.
On the corporate website she finds lots of information about products she may or may not be able to buy. And she finds lots more information about the business opportunity. But it’s nearly impossible to find a phone number or customer contact function.
When she finally does find a general number under the “contact us” tab she’s met with an automated call direction system. She punches the key for customer service only to get a recording that says that “customer service hours are 9 to 5 eastern standard time Monday through Friday” and to leave a voice mail message. She leaves a message along with a call back number.
By noon the next day she still hasn’t heard from the company. So she calls back only to be confronted with a recording that tells her “all service associates are busy now and that the wait time in 19 minutes.”
At this point she’s frustrated. She’s wasted as much as an hour of her time and she still has no answers.
So she calls her friend Mary, the sales person who took her order. Mary, feeling her frustration, says “Don’t worry, I’ll call the company and get you an answer.” So now Mary calls the company. And guess what? She gets a recording that says “all field services lines are busy. Your expected wait time is 14 minutes. Please say on the line.”
Unable to get to a field service rep easily, she goes her online back office and looks in the FAQs. The answer may or may not be there. Or the answer may describe a process but then state that in order to put the process in motion Mary must speak with a field service rep.
Mary and her customer have spent a lot of time and made many attempts to get the customer’s issue resolved, all to no avail. The customer is understandably frustrated and angry. Mary is frustrated and embarrassed by her company’s failure to be responsive. How enthusiastic do you think Mary’s customer will be to buy from her, and your company again?
Now you may say “Oh, Alan is exaggerating!” or “That experience is the exception and not the normal experience.” Wrong. This type of experience is in fact typical with most direct selling companies, especially at the end of the month when commissions are being run.
What’s more, at too many companies that I work with, the connectivity for sales people is often no better and frequently worse than what retail customers experience. Skeptical? Okay, do this: Pick a night around the 29th or 30th of the month. In the role of a customer, try to get a complaint resolved at 10 pm in less than an hour. See if you can reach a live person by phone or by chat. Find out what hoops your customers have to jump through before they can get relief.
Now in the role of a sales person, call the field sales service line in the last few days of any month and see how long it takes to get through to a live person. I can almost promise you it won’t be a pleasant experience. And don’t try to excuse the experience based on the fact it’s month’s end. Your customers don’t care about the company’s month end issues; they simply want the same kind of service they can get from the best on line providers.
What must direct sellers do?
We’re faced with a tidal wave of dissatisfaction. Customers are dissatisfied with their after-sale service, and sales people are dissatisfied with their after-recruitment services. Fortunately, there are ways to curb this tide of discontent. Here are my suggestions:
1- To be competitive, direct sellers must recognize that timely service, both to customers and sales force members, is no longer a “a nice to have.” It’s a “have to have.” That means giving customers and sales people the ability to reach a live person by phone or online chat on a 24/7/365 basis. Just look at the times your sellers are placing orders. The traffic is heaviest between 8 p.m. and midnight. That’s when they’re doing their business, and that’s when they want to talk to someone at the company about their questions.
2- Direct selling companies must step up their pick pack and ship operations, and the time required for delivery. More and more, 5-7 days for delivery is becoming untenable. Why buy from you when I can get it online in 24-48 hours?
3- Understand this all-important new rule: Millennials won’t buy from a company with poor customer service, and they won’t sell or recruit for them either. Most sales people are customers first. They know what the good examples of service are because they experience what is good when buying from online and from world class retail vendors
4- Customer and field services can no longer be looked at as simply a cost of doing business. They must be brought to the forefront of your strategic thinking and business investment. How well a company provides service may well determine its success or failure in coming years. Good service will reduce sales force attrition better than all the incentives you can dream up. It will also become one of the key factors in the recruiting process. Service will soon join great products, a great compensation plan and a great social media image as one of the critical elements in determining whether a person will buy from your company or sell your products.
How well direct sellers adapt to this new competitive challenge may well determine the fate of the industry itself. The tidal wave is coming folks. Elevate your services or run for high ground!