Three Forces Driving Change for Direct Selling
This week’s guest post is from Alan Luce. Alan 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
Three Forces Driving Change for Direct Selling
“Change” is something that all business managers supposedly recognize and embrace. In truth, change often passes unnoticed. It happens while we’re busy dealing with the world as it was yesterday not realizing it’s already tomorrow.
Success in and of itself is too often the enemy of change. A long run of success breeds a conscious or unconscious belief that the way to ensure further success is not to mess with the formula that brought success in the first place. Too often when a successful company begins to slide we hear this from top executives: “Everything will be all right if we just get back to basics!”
No longer. Unfortunately, going back to basics is often exactly the wrong thing to do in today’s direct sales world.
Direct selling is in an era of profound change. And this change is:
• Redefining what direct selling means
• Expanding the forums in which its sales people sell
• Re-shaping what customers expect from direct sellers and what those sellers expect from their companies.
Three major forces are driving this change at an ever accelerating pace:
• Customer/Recruit expectations
• Social media
And as you might expect, all of these forces are related and intertwined with each other. Let’s examine each.
This is a two-edged sword. While technology empowers the field, it also requires more and better communication between a company and its sales force.
Yes, I know everyone talks about the impact of technology on our daily lives. I want to focus more on the technologies that are most strongly driving the change in direct selling. In order of importance they are:
1. Online order processing and genealogy and compensation plan management.
2. The Internet as the new “downtown.”
3. The growth of cell phones as visual as well as audio communication devices, and more and more, as transaction platforms.
Online order processing and other back office capabilities have revolutionized the ability of top field leaders to manage their businesses. Instantly available data helps leaders motivate, communicate with and track the progress of their sales organizations. Depending on the age and features of a company’s system, a field sales leader can manage her personal and downline business, and do it as well or better than home office executives.
This ability has forever changed the equation of power between corporate sales management and the independent field leaders. No longer are the field leaders totally dependent on the company to dole out whatever analysis and information it chooses to share. Field leaders can now easily analyze the impact of promotions, incentive programs, training and other headquarters driven initiatives.
Many companies fail to realize this shift in information access changes the boundaries of the home office/field relationship. Armed with information, today’s knowledgeable field leaders are becoming more savvy, demanding and independent. That means companies must be more respectful and collaborative in order to have successful working relationships. In other words, they need to persuade rather than direct. The days of the field blindly following everything that the home office tells them to do are long over. But many companies that seek our services have yet to realize that.
Combine this field access to data with the ability to communicate with both downlines and customers on the Internet “downtown.” The company-driven social aspect of direct selling has been turned topsy-turvy. Folks used to go to sales meetings and events to experience the social benefits of being a direct seller. They received training, recognition and an understanding of the company and its culture. And they created friendships and bonds through personal interaction with one another.
But today, social media outlets deliver many of those same elements, and do it in real time. Interactive forums like Skype and Go to Meeting have significantly reduced the appeal of and willingness to attend local sales meetings. That’s why we see attendance at sales meetings and conventions dropping year after year. It’s not just the cost of attending that’s driving these declines. It’s simply the fact that the sales force is getting many the benefits of attending live meetings via their online forums. That’s why it’s critical that companies contribute significantly to this positive online experience.
To cope, companies must focus local, regional and national meetings on what personal interactions deliver best: recognition, new product training, motivation and inspiration. New recruit training, leadership development and general product training must now be delivered where the sales force expects to find it — online. This change requires a whole new thinking about the purposes that regional and national conferences and meetings serve. Consider:
– Are your events for new sellers? Or are they primarily for new and established leaders for whom the expense may be more justified?
– What deliverables will make the attendees feel that the time and expense was worth it?
– What performance metrics of the company will the meeting positively impact? And will the impact be worth the time, effort and cost of the event?
– Can company meetings & events be combined with incentive trips to make them more cost effective?
– How do your digital marketing, communication and training strategies complement your live events?
The explosive growth of e-commerce has forever changed the meaning of access, service, and convenience for the customer experience. The gold standard for all three of these terms is now set by companies such as Amazon Prime, Zappos and other top tier online marketers. They’re always available, easy to shop and have fantastic and accurate delivery. Plus, they offer hassle free customer service for returns.
Surveys show that the access, service and convenience offered by these online merchants is becoming what customers expect from every merchant. That goes for brick and mortar stores, online retailers or direct selling companies. Here’s what that means for you: direct selling companies must enable their sales force to meet these new customer expectations and standards. Those who don’t are going to find they can’t attract and keep customers or sales force members. In fact, it may be safe to say that these customer expectations are rapidly morphing into customer demands.
So what does this mean in practical terms for direct sellers?
Well for one thing, if people don’t have their service expectations met as customers, they’re unlikely to consider joining your company as sellers. Direct selling has always been about converting customers into sellers and business builders. The adage “if they won’t buy from you they won’t sell for you!” has never been more applicable than it is now.
So what’s the best way to meet these changing customer expectations for access, service and convenience? Well, the fastest growing companies are supporting their sales force with technology tools that enable each seller to approximate the best online service levels, while still providing the personal selling touches that have always been the hallmark of direct selling.
These companies understand successful sales people must be able to provide easy 7/24/365 access to online purchasing. That’s in addition to the ability to sell one-to-one and one-to-many using smart phones and mobile devices.
The new direct selling rule for success is: Meet and service your customers where they want to interact, online or in person. And allow your customers to shop when they want and how they want!
The good news is direct sellers are beginning to recognize this change and are adapting to this new reality. We now have companies that conduct all of their field business online, with little or no face time. My newer party plan clients who provide their sales force with the technology tools to sell one-to-one or one-to-many online are finding 50% or more of their “party” sales are taking place online.
And more and more, companies with products that lend themselves to regular reorders are discovering the benefits of customer clubs that offer discounts, special offers, product education and useful content information. Customer clubs are an efficient and easy way for customers to reorder consumable products, shop new items and respond to special offers.
Most clubs provide members with direct online user access to the catalog and shopping carts. Of course, the field sales person who enrolled that retail customer as a customer club member gets full credit for the sale. The result – retail customers are more likely to go online to make purchases using direct access rather than to go their sales person’s replicated website.
From the customers’ perspective, gaining online access to a company’s products via customer clubs rivals the best online buying experiences. Direct sellers who thus enable their sales force to meet their customers’ expectations get the best of two worlds. One is the direct selling tradition of building through enthusiastic product and service evangelists. The other is the customer loyalty benefits resulting from outstanding access, service and convenience through online tools. If you look under the hood of the industry’s fastest growing companies some version of that combination is what you’ll find.
One of the most profound changes confronting direct selling companies is the impact of social media. This is a critical “must address” element of building and sustaining a profitable direct selling business. Unlike the past, the most important factor in recruiting new folks as customers or as sales people is a positive presence and image on social media.
When customers hear about your products online or at a party, the first thing they do is look up your company and products on Facebook, Twitter, and Pinterest. They want to learn what other customers think about your products and your company. Do they like the products? Was the service acceptable? Are there any unchallenged negative comments or reviews about the company, its products or service? The way customers talk about your products and company on line will have a major influence on whether that person will buy from your seller or attend your product party.
And if social media have that kind of impact on buying decisions, imagine what kind of influence social media have on your recruiting efforts. In a word, EVERYTHING!
No longer is recruiting solely a function of the sales person armed with company prepared materials. In fact, today a prospective recruit’s most influential source of information is your company’s social media reputation. Your company can have thousands of happy sales people, but if the only information on social media is complaints and negative comments from a few unhappy sales people it will negatively impact your recruiting numbers.
To be successful today, attention to your social media presence must be every bit as great, if not greater than your attention to your corporate website. People expect your website to be full of positive upbeat information about your company. That’s where you’re trying to sell folks on your products and opportunity, right? More and more, people distrust what we say about ourselves and our products. They put much more faith in what customers and participants in your business opportunity tell them. You better have positive comments from them on the social media sites.
The need to build a positive and informative social media presence is now essential to a new company’s success. So much so that we routinely suggest to startup clients that they begin implementing their social media strategy well before they start to sell and recruit. Building your social media image is a foundational element of your overall digital marketing strategy. Companies must first build a positive image and story on social media. And then they need to protect their online image and reputation with the fierceness of a junkyard dog!
The first step is to recognize what’s happening and why, and then find ways to adjust. For direct sellers it’s all about finding new ways to adapt the core “people strengths” of direct selling: opportunity, aspiration, inspiration, recognition and self-development. Do this in ways that meet and exceed the expectations of our customers and recruit prospects. When companies do that well they’ll prosper. Fail to address the changes and you will not.
Change. You can’t ignore it, run from it or hide. You can only work to recognize what’s going on, work to address what’s happening and then embrace the change. It’s a never-ending process.