Vince Han is the founder and CEO of MobileCoach and a frequent speaker at conferences such as Training Conference, DevLearn, FocusOn, Online Learning, ATDTK and others. He holds an MBA from the MIT Sloan School of Management. Vince is an industry thought-leader for learning and learning technology with an emphasis on artificial intelligence and chatbot technology. Vince has founded several successful technology companies and resides in Utah.
Guest Post by Vince Han
How Technology Will Disrupt Direct Selling – Are You Ready?
There is a quote attributed to Henry Ford that goes, “If I had asked people what they wanted, they would have said a faster horse.” This quote highlights the fact that when it comes to innovation, incumbents and established entities are blind to what’s coming until it’s too late. During the advent of the automobile, surely there were horse breeders and wagon makers who scoffed at its first iterations, but given ample time, innovation will disrupt even the most powerful and established companies.
In recent years, direct selling pundits and executives have bemoaned gig-economy services like Uber and Airbnb and their meteoric growth rates, saying that they have, snatched away time and revenue from what should have been direct selling’s target audience. Also to be bemoaned? The precision and friction-free online shopping experience that Amazon has created.
Looking at these services, it’s fair for a direct selling executive to be asking, “Shouldn’t these innovations have started with us?” But there’s another question that executive should be asking: “What else are we missing?”
Admittedly, forecasting trends and being bold enough to invest in them is much easier said than done. Rather than beating ourselves up, it’s useful to understand some basic human psychological biases that make embracing innovation so hard:
- Confirmation bias – We subconsciously seek out data that represents “proof” to confirm our current strategy, even if our current strategy is wrong. “I’ve asked all my neighbors and they all tell me that they would never give up their horse for an automobile.”
- Sunk cost loss aversion – We spend so much money and time with our existing initiatives that the prospect to throw that all away seems to defy logic. “We just invested a year’s worth of profits designing our new carriage line to accommodate four horses, there is no way we’d throw that away.”
- Greed – reed’s crowning attribute is to rob the future for the present. “We have a ton of interest in our new four horse carriage line now, let’s bank it and worry about the future later.”
- Herd mentality – We instinctively conform to group think, or the behavior of the herd which gives us a false sense of security. “Not one of our real competitors are looking at that automobile idea so it’s not likely that we are all wrong!”
So, in our defense, the fact that we are human makes it more likely that we are blind to important trends and innovation and we often view “innovators” as people with heads in the clouds and not based in reality. However, it certainly feels like we are at an inflection point in the direct selling business with more millennials being drawn to the idea of freedom of employment and more technology that interconnects us to a point where finding and selling to customers is not as hard as it used to be.
So what trends are on the horizon that direct sellers should be watching carefully (if not leading the charge)?
- Frictionless user experiences – One of the hardest things to do is to make things simple, which is why the companies who figure this out truly are innovators. This means that there cannot be any sacred cows preserved in the design process of the experience you design for your customers. Each click or swipe that you require a distributor or customer to do has so much more cost than you think. The best emerging services in the world are so frictionless that any friction in your flow will make the experience feel clumsy in comparison.
- Multi-sensory user experiences – The value of augmented reality and virtual reality still feel elusive to you? These technologies are just getting started and while the initial use cases that dominate their headlines seem more centered around gaming, the potential is tremendous. Imagine party planning hosts constructing elaborate virtual or augmented reality parties or creating real-life simulation trainings for your distributors. Imagine being able to hold meaningful conversations “face to face” with someone across the globe with simultaneous translation?
- Artificial intelligence and chatbots – Hollywood has done us all a disservice by portraying the ideal of a computerized AI and chatbots being able to converse with humans at an emotional level, like a friend. Therefore, many people don’t believe chatbots have value until Siri can actually replace a real friend (she is far from being able to do that). Quietly, there are arising many value-filled use cases for chatbots and AI, including step-by-step onboarding experiences, informational assistants, front-line customer service, and more.
- Robust API and IoT ecosystems – If direct selling companies do not have robust, extensible APIs with their databases, they will inevitably fall behind. The more context you have, the better chance you have to deliver the right content to a customer. Context requires “things” to talk with each other from the physical things in your environment (hence “Internet of Things” or IoT) but more importantly, systems. Making contextual data available at your distributors’ fingertips is a powerful innovation. Most companies have some semblance of a dashboard today, but imagine a dynamic dashboard that updates you on the most up-to-date, actionable data no matter where you are.
- Software that works – This one is admittedly a bit tongue in cheek but developing software that works the way it’s supposed to can be hard stuff. One could argue that the companies that just deliver software that works are innovative in their own right! This represents companies who are disciplined, smart and restrain themselves from the dreaded biases listed above.
There are undoubtedly other important buckets of innovations not on this list. After all, the very definition of an innovation is developing something that didn’t exist before. So what now? You are committed to embracing the appropriate levels of innovation and disruption, where do you go from here so you aren’t stuck “trying to breed a faster horse”?
It’s critical that direct selling companies hire, retain and empower technology executives that understand the complexities of implementing innovative technologies but are first and foremost champions of the user experience. Less experienced technology executives will let fear of bugs and scope creep direct their biases. More experienced technologists will be a champion of frictionless experiences and user delight.
Direct selling executive teams need to surround themselves with a diverse group of thinkers and doers, deliberately examining and challenging current assumptions as well as the data that is informing those assumptions. Healthy debate and counter-debate is a great antidote to the biases of herd mentality or loss aversion. These teams should also develop a culture of trial and error. Constant tinkering done with purpose and an infrastructure of measuring ROI will do wonders to keeping open minds and staying ahead of the competition.
Which direct selling companies will be the multi-billion dollar companies of tomorrow? I’m betting on the innovators.