Actionable insights and opportunities from the first-ever direct selling generational engagement study.
Direct selling has become an increasingly popular avenue for individuals to start their own businesses and earn income. To gain a comprehensive understanding of the perceptions surrounding direct selling, the Direct Sales Generational Engagement Study was conducted by Bridgehead Collective and carried out by The Center for Generational Kinetics, led by President Jason Dorsey.
In this first-of-its-kind study, Bridgehead Collective chose to partner with the Center for Generational Kinetics, which has led more than 100 research studies in all major industries. Their seminal annual study, The State of Gen Z, formed the basis for the best-selling book, ZConomy and has been consistently featured in national and global media including The Wall Street Journal, New York Times, CNN and many more.
I set out to discover America’s perceptions of entrepreneurship, the gig economy and—more pointedly—direct selling. Statistical significance was of ultimate importance in this analysis, so the study represents a wide-sweeping sample that is reflective of America, with an equitable mix of genders, demographics, employment status, education levels and location that allows for a 97 percent confidence level. This study aimed to explore the attitudes, motivations, limitations and beliefs about starting a business in America, as well as uncover perceptions of direct selling, recruiting strategies, onboarding methods, distributor retention and preferred payment structures.
We designed the study to provide actionable insights across 10 key categories:
- Perception of Industry and Channel
- Recruiting and Prospecting
- Motivations and Decision Criteria
- Onboarding and Getting Started
- Compensation and Value Proposition
- Incentive Trips and Events
- Duplication and Role of Team Building
In this series, we are digging deeper into each of these categories, focusing this month on all things Compensation and Value Proposition.
As we shared consistently throughout this series, the news surrounding all generations is that EACH is radically different in how they want to be prospected, talked to and approached about direct selling opportunities. We have highlighted that a “One-Size-Fits-All” approach simply doesn’t work anymore, and that insight continues when it comes to compensation plans and the overall value proposition that each generation sees in direct selling.
Money Changes Everything
Last month highlighted the methods, channels and types of training preferred by each generation. The stand-out insight was the need for a clear, simple roadmap for success. Something that outlines the prescriptive steps to take—but not in any way taking away from the authenticity and spontaneity of a successful direct seller.
The insights we gleaned around compensation were likely the most shocking to me. I mean—really—of all the things I thought each generation could agree on, money would have been at the top of my list. How complicated is money?
The more, the better, right?
But let’s start first with what each generation does agree on. We chose to structure this part of the study around what each generation would need to feel like their experience with direct selling was “worth it.” We chose this language because it speaks both to overall satisfaction as well as a judgement on reward vs. effort, a key to retention.
The first question we asked was around what would absolutely convince them to stay at a direct selling business after the first three months. As you might expect…all generations agreed that the number one reason (by a landslide) was getting paid and receiving money in my account.
But what was surprising was when you start to dig into the second and third choices. That’s where the generations diverge in a practical AND philosophical way.
Lending a Helping Hand
Our youngest respondents, Gen Z (18-26), shared that the belief that they are part of a cause or movement would absolutely convince them to stay at a direct selling business after the first three months. The vast majority of this audience listed this reason as the #2 or #3 for their loyalty.
Action Item: Let your charitable light shine. So many of us have great causes at the heart of what we do, and there are entire articles to be written about the collective impact our channel has around the world. But how much do we emphasize this to our newest representatives? Before you skim to the next paragraph after mentally checking this one off in your mind as an “of course we do”….you might want to check!
We did a blind sample of 15 top direct selling companies last July—all of whom have donated more than $1,000,000 to causes they care about. Only two of them shared any information with us as part of the join flow, starter kit, welcome messages, getting started, onboarding or recognition in the first 90 days. Only two. Ensure that you are promoting your cause; celebrating the successes; and showing new folks how they can easily get involved, sooner rather than later!
Show Me the Money
So…what about our Gen Xers and Older Millennials? Well…they had a more practical affirmation for their #2 and #3 things that would absolutely convince them to stay….and it had to do with proof.
Eighty-four percent of Gen Xers reported that seeing the product or service work in their own life was a critical element to their ability to continue to represent a brand. That’s significant—and significantly more than their younger counterparts.
Action Item: Survey new representatives in the Older Millennial and Gen X category within 90 days of joining to ensure they are seeing and feeling the benefit of the product in their own lives! Sounds simple but think how powerful it is.
I’m talking one question—via text—sent asking for a scale of 1-10. Think what you could learn. Those that are 6-10 are happy with the product? You’ve just reminded them of that fact. For those who enter 1-5, think of the incredible opportunity you now have to reach out; show them how much you care; how much you believe in your product; and how important their experience is to you. And if you’re feeling under-resourced—utilize AI tools to save some execution time.
Okay, so that’s the start of the value proposition—what would convince me to stay? Again, while divided on the second and third choices…all generations were united in their declaration that money topped the list.
How much money? That’s where it gets REALLY interesting.
The Magic Numbers
Radical differences emerged when we asked all respondents “how much money would you have to make per month in direct selling to absolutely convince you that it’s worth it.” Me, in all my Gen X smugness, was pretty sure I knew the answer. After all, I’ve long preached that “if the number you’re talking about doesn’t have a comma in it, it’s not a big enough number.”
Well, turns out I was right…but not for everyone. Not by a long shot.
Older generations are significantly more likely than younger generations to believe direct selling is worth it if they make $1,000 or more per month, but younger generations are significantly more likely than older generations to be convinced that direct selling is worth it if they make between $250-$499.
That’s it. Between $250-$499 is the sweet spot for them—vastly different than reflected in the older generations.
Further digging into the data shows that when you talk about an income opportunity of more than $1,000 per month, especially early in the business, younger generations are more than just nonplussed…they are turned off. Their “scam-dar” goes up, and they can’t get to YouTube fast enough to search “Is insertyourcompanynamehere a scam?” And guess what they find then? Nothing good. Don’t look, it will just depress you.
Action Item: Tone all discussion of income down. Way, way down. Phrases like “supplemental income” are your friends. There is no need to give anything other than a realistic picture of what they can reasonably expect to earn in their first few months…along with, of course, a fair picture of the significant effort that they will have to put forth to achieve it.
We only have things to be proud of here, fellow direct sellers! Really. Not only is a modest discussion of income—paid only through the sales of products to end customers—the gold standard of compliance right now, it has the added benefit of being the right thing to do and the shining prize of also being EXACTLY what the next generations want to hear.
What’s in It for Me?
And make no mistake the next generations are looking for additional income opportunities no matter how big or small. Throwback stat from the first in this series: 76 percent of all Americans would like to own their own businesses in the next three years.
In fact, 83 percent of those reported they would choose direct selling if they knew they could make $500 of extra income each month. Imagine if your conversion rates were 83 percent? Your retention rates? That would be needle-moving action—and all for just being transparent, realistic and honest at every opportunity.
Wow Stat: 83 percent of Americans would get involved in direct selling if they knew they could make $500 of extra income each month.
So we’ve established that money is the primary driver—not empty promises of too much money—just a reasonable amount of income for a reasonable amount of effort. But compensation is so much more than just the calculations of overrides and commissions. We have long known the power of using cash bonuses, gifts, travel, experiences and other goodies to round out the full compensation package to ensure each of our sellers feels motivated and inspired each month.
Thank You Very Much
This study probed into exactly what types of performance incentives would make them feel most valued. The top three had a wide margin of victory over all other choices.
There is a really interesting distinction. Cash bonuses for a goal-based incentive trumped “consistent and predictable selling percentage” as a topper!
Action Items: Take a look at the front end of your compensation plan. Is there a simple and easy way to break up your initial selling commission into a combination of flat selling percentage and cash bonuses for milestone achievement? A change here may be simpler and easier than you think and could help you tap into this timely and powerful motivator. Next, trips are increasingly table stakes. Ensure you aren’t overlooking the value of trips and experiences if you don’t already have them in place. And if you do, make sure you are making recognition hay out of it.
Too often, our trips become like wallpaper—rarely commented on during the actual earning period. Make sure you don’t get complacent with promotion of your incentive trips (especially if the earning period is over a year) and ensure that you are keeping those Instagram-able experiences front and center with your field. Remember…it’s only a big deal if we make it a big deal.
So that covers the compensation and “what makes it worth it.” Next month we jump into all things recognition. Bored with your recognition? Most of your field leaders are, too. We’ll share what is really motivating each generation.
WANT TO KNOW HOW ATTRACTIVE YOUR COMPANY IS TO EACH GENERATION? Schedule your Generational Attraction Assessment today, complimentary for DSN Gold and Platinum Supporters.
With 20+ years of cross-functional experience in direct selling, Heather Chastain brings a solid understanding of sales, marketing, technology, manufacturing, operations and C-Suite challenges as well as a strong collaborative and relational style of leadership to the table. Heather has held executive roles at Shaklee, Arbonne International, Celebrating Home and BeautiControl. Heather also serves as the Strategic Advisor at DSN and is the Founder & Chief Executive Officer of Bridgehead Collective.
From the December 2023 issue of Direct Selling News magazine.