The Climate is Changing in Direct Sales
This week’s author Steve Jamieson is the Strategic Advisor and Director of Business Development at Exigo, a company that delivers access to the data that drives businesses, from CRM to transactions to commissions. Steve has a 20+ year career in direct sales that included working as the CEO at three prominent network marketing companies and as the CMO and Executive VP for Success Partners and Success Magazine. Steve is a graduate of Queens College where he studied Political Communication.
Guest Post by Steve Jamieson
The Climate is Changing in Direct Sales
Without sounding political, most everyone agrees that climate change is a global phenomenon that is happening right here, right now. Some people only differ about the cause.
According to the most recent DSA-published reports, direct sales is experiencing a similar phenomenon. Sales and recruiting have been slowly melting away for the past 3 years while the tide of success for other competitive alternative income opportunities has been rising at an alarming rate.
In the case of direct sales, virtually no one is arguing the cause and effect… only the solutions.
The formula for success of non-MLM alternative income opportunities follow a consistent pattern. The companies are directly involved in customer acquisition for their sales reps or service teams. Their compensation plans are built for the 85% instead of the 15% and explained in the same time it takes to tip and rate an Uber driver. They have personalized their sales technology and customer experience. They focus first on solving a problem for a particular customer, instead of inventing a solution in order to find a customer who needs it.
It has been said many times that a taxi driver did not invent Uber and a hotel owner didn’t invent Airbnb, and if that be the case, then more than likely it won’t be a distributor who will have the inherent skill set required to re-invent direct sales.
Yet, we still find mostly former distributors sitting at the head of the table as either the Founder, CEO or President of a prototype direct sales company.
This is a potential problem because a distributor’s instinct is to perfect the current business model, when the solution might need to look far beyond our current best practices.
It is hard for a Distributor/CEO to fix something they don’t see as broken! It’s hard to move away from a solution that made you so extraordinarily successful.
Many of the top 100 direct sales companies have not been growing in North America, but are sustaining themselves with international success, recruiting distributors from other companies, promoting the promise of a hero product or spiking their comp plan for short-term gain.
Needless to say, in this instance the climate needs to change!
Private equity firms have been investing in direct sales companies ever since Warren Buffet led the way with his acquisition of Pampered Chef. Unfortunately, investors brought their money and not the type of executive team who knew how to be change agents. Outside executives were so insecure on how they personally fit into the direct sales culture, they couldn’t see how the direct sales culture needed to fit into many of the same forward-thinking technologies and business strategies that were revolutionizing retail, e-commerce and other alternative income opportunities.
Today, the climate is changing, because new executive teams are leading the change, whereby the old guard was simply reacting to it.
The executive carousel in the past 24 months has been dramatic. Leadership changes at companies such as Arbonne, AdvoCare, Thirty-One Gifts, Herbalife, Plexus, New Avon and Amway, just to name a few, are bringing in a new wave of non-traditional direct sales expertise.
Customer acquisition, e-commerce and brick and mortar experts from Purple Mattress, Spanx, Yves Rocher, Unilever and Pizza Hut are now on board moving direct sales companies into a new era of micro-entrepreneurship and influencer brand marketing.
In the first month of 2019, Perfectly Posh is demonstrating the power of paying sales reps instant cash on every sale instead of old school weekly paychecks. Crescendo is paying customers instant cash back on every purchase and paying customers to give away free product samples to their friends and family. Watch Total Life Changes move from network marketing to network partnering with an aggressive plan to corporately acquire new online customers and utilize their distributor field for closing sales, upselling, building brand loyalty and culture. RevitalU is giving away almost $100,000 a month to people who simply watch one of their daily business opportunity presentations on Facebook Live.
The climate for direct sales is changing because the consumer driven economy has changed, and we now have companies in our vertical that understand how to be a part of that change.
Of course, technology plays a key role but only when proceeded by thought leadership. Thought leadership can only be the answer when we have agreement on the problems we need to solve.
Can we agree in 2019, we won’t solve customer acquisition with only motivation and training? When possible, we will allow your customers to try it before they buy it. We will think on how to pay our customers to work for our distributors. We will have a compensation plan less complicated than the ingredients on our label. And won’t think outside the box… because there is no box anymore!
If you believe now is the time for the climate in direct sales to change, then you are already a part of the change that is happening, and we are all anxious to see where you will take us next!