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
- Training
- Compensation and Value Proposition
- Recognition
- Incentive Trips and Events
- Retention
- Duplication and Role of Team Building
In this series, we are digging deeper into each of these categories, focusing this month on all things related to Retention.
As we shared consistently throughout this series, the news surrounding all Generations is that EACH generation 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 this continues to be evident when we are digging into the topic of retention. An interesting set of facts uncovered by the study is that retention may be made up of even more elements than we may have previously thought. In particular, the research highlighted an increasingly strong correlation between recognition and retention.
Last month we focused on incentives and events and pulled out the types of incentives that really get people motivated today. But as we have shared in previous articles, Younger Millennials and Gen Z team members are highly motivated by “being seen” and they have their own ways of measuring what that means.
Retention, as you have heard me say many times, is the holy grail in this industry. Solid retention can cover a lot of ups and downs in the business and can save hundreds of thousands of dollars in promotional spend. While customer retention (and the ever-important lifetime value) is a huge piece of this, today we are focusing exclusively on distributor retention. What motivates each generation to stick with it? To keep engaged and active—even when it’s hard? Even when they are faced with rejection and criticism? Read on, my friends…
What Matters Most
We started our study by probing around key inflection points for retention, the first one being getting over that first 3 months. We have long known that this is a critical milestone and if you don’t believe that…just look no further than the crazy number of “Fast Start” programs that cover the first three months in business.
So, building on that and hoping to inform improvements to Fast Start programs all over the nation, we started with the question, “What would absolutely convince you to stay at a direct selling business after the first three months?” Doesn’t get any more on the nose than that, does it? Here were their responses. Not surprisingly, topping the list for everyone was actually seeing some income. The bigger question is probably why only 55 percent said that was first! (insert the laughing emoji that corresponds to your generation here). So, I think if we assume that EVERYONE wants and needs to get paid, we can learn a lot more from the subsequent responses. By the way, we will also be covering how much money is actually needed to stay.
“Seeing the Product or Service Work in my Own Life” and “Feeling Like I Have a Good Plan in Place” are second and third motivators to stay with your business. I think we can all understand the need to feel the benefits of the products, especially in our increasingly authentic world of digital sharing and selling. But what I found super interesting is that this was one of the lowest ranked categories for Gen Z. Instead, what jumped to the top of the list for them was “Being Part of A Community of People who Support Me and Make Me Feel Included.”
Read that again. For all Americans, ages 18-24 after getting paid, the single biggest motivator to stay with you is if they feel included in your community! Number One.
Beyond interesting, that can be very instructive for us as we prioritize the ways we engage with our fields. Because—wait for it—only 19 percent of this group said they actively engage with Facebook and consider it a place to engage with like-minded people.
So, for all of us with Facebook groups as our primary means of communicating, engaging, etc., it is time to realize that’s not meeting the needs of our next generation of sellers. We have to engage with them elsewhere. In addition to content creation and brand engagement through Instagram and TikTok, please consider a stand-alone community building approach like Shout, Mighty Networks, Community or Tribe. Platforms like this can be very cost effective; easy to set up and maintain; and have significant features built in to increase engagement and sense of belonging.
Build Confidence, Build Loyalty
Moving up the generational ladder to Younger Millennials (ages 25-34) the landscape of retention shifts again. Remember from our past articles in this series that confidence is the watchword for this generation. I recently spoke at the Direct Selling Leadership Conference in Austin and shared a story I think many of you can relate to. There’s a phrase that I believe has been attributed to every founder of every direct selling business in the ’80s and ’90s, so I’m not sure who said it first but the quote is, “All you need to do to be successful in this business is treat everyone as if they are wearing a sign around their neck that says ‘Please make me feel important.’”
The modern equivalent of that, at least for Younger Millennials, is to treat them as if they are wearing a sign that says, “Please help me feel confident.” Confidence. That’s it. This is the generation that doesn’t believe they have the skills or ability to be successful. They are craving things that make them feel confident. So, it shouldn’t be a surprise that the number one motivation for retention for this generation (after money, honey) at 72 percent is “Feeling Like I’m Getting a Good Sense of What It Takes to Build My Business.” Seventy two percent—that’s huge!
So, how do we ensure that? Go back to some of the tips from the onboarding and getting started articles about having a clear 90-day success plan, certainly. But also…ask them! Really. They will tell you.
We are pretty good at communicating TO our new distributors and representatives. But are we good at communicating WITH them? When and how do we ever really check in with them? See how they’re doing? Ask them what they need? I know, I know, this is what we pay “uplines” for, but in today’s world we are missing out on a huge opportunity to learn and improve.
It is easier than you think to set up a quick poll or quick action text feedback for new people who have joined the business. And all you need to understand from this generation is how confident do they feel? Do they really have what they need to be successful? If not, what are they missing? I think you would be shocked at how little information and encouragement they actually receive from the company that is geared towards this type of messaging.
Here’s my challenge to everyone reading this article. As soon as you finish reading, go to gmail and set up a new email address. Then join your own company. Watch and see what you actually receive. What arrives in your inbox? What emails do you get and with what frequency? Could you be successful if that’s ALL you got? Do you feel Welcomed? Included? Celebrated? Do you even feel Acknowledged?
Then learn from that. As my eldest (a proud Gen Z) says, “Then do better.” Confidence is key.
Show Them the Money
Another big key to retention is and always has been tied to income. But—as we covered in our earlier article on compensation—the amount that makes it “worth it” to stay is very different for each generation.
$250 – $499 is the sweet spot for Younger Millennials and Gen Z while our older generations are looking for a bit more in order to stay. My advice on what to do about this? Focus everyone who wants to build on getting to the $500/month level as quickly as possible. Then build from there.
Tailor your marketing, getting started and onboarding program to that level. I know many of you target and want to get much higher, but it’s simply not realistic nor required in this world we are living in now. $500 is more than enough.
I encourage all of you to take a baseline reading for your organizations. Find out what percent of new people joining each month hit the $500 income level and—of those that do—by what month after joining? Then correlate that to your retention rates. And then money-ball in on this stat. How can you move this needle higher? What if your sales team was incentivized on just this stat? How would this change the daily activities? The success rate of new? Their retention? And then…as that develops…rank advancement, sponsoring, etc.? All retention roads lead somewhere great!
Making Folks Feel Seen
The last key area we studied with respect to retention was digging into what performance incentives would make them feel “most valued” as a distributor? For older folks, cash bonuses topped the list, coming in as the number one driver.
But again…not so much for the younger. Of course, they want to earn, but they want to be seen just as much. Recognition in front of peers and recognition at a national or international meeting are valued significantly more as performance incentives by younger generations compared to older generations. 73 percent vs. 60 percent to be precise. The “in front of peers” can be accomplished (and feels just as good) through these digital communities we have been talking about. Make sure you are really rewarding activity and engagement right along with performance. Trophy generation prevails, and a little encouragement goes a loooooong way with this crowd.
So that covers retention with three key takeaways to put into action to drive those numbers up. We often tell our fields that Customers “add” and Distributors “multiply” their business. I’m here to tell you that if that’s true…Improved Retention will provide “exponential” growth. Next month, we finish up our series with a deep dive into Leadership and Team Building. Is it really relevant anymore? Check back in to find out.
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 April 2024 issue of Direct Selling News magazine.
