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Direct selling is a pliable industry. Network marketing or party plan, direct selling can be what distributors need it to be at any given life moment, equally meeting the needs of retiring baby boomers and 20-something moms.
Few industries can boast this flexibility. Yet to stay relevant and competitive, direct selling companies must expand their understanding of a customer and distributor base that’s morphing before their eyes.
Generational lines are blurring and a new era of the connected consumer—Generation C—is at hand. “The connected consumer is the stranger you must get to know, and in contrast to the customers of the past, this group is only growing and it’s traversing demographics,” says Brian Solis, new media thought leader and author of What’s the Future of Business: Changing the Way Businesses Create Experiences.
“Nowadays, age ain’t nothing but a number. It is how people embrace technology—from social networks to smartphones to intelligent appliances—that contributes to the digital lifestyle that is now synonymous with Gen C,” Solis says.
“Nowadays, age ain’t nothing but a number. It is how people embrace technology that is now synonymous with Gen C.”
—Brian Solis, author and new media thought leader
It matters little to which traditional generational demographic these connected consumers were born. What’s more important is they behave differently than their traditional counterparts. There are now two very different sets of baby boomers fretting over dwindling retirement accounts, and while the majority of Gen X and Gen Y are connected, “pencil and paper” girls still exist outside the digital majority.
For direct selling, these connected consumers are not only customers but also distributors. To better understand the opportunities created by their arrival, it’s important to sample the industry’s current distributor demographics.
Baby Boomers, Gen X, Gen Y
Generationally, baby boomers, Gen X and Gen Y all bring something different to the direct selling table. Maturity, stability and experience make boomers terrific mentors, while Gen X brings an energy and tenacity for finding new ways to do things. Gen Y is out for adventure and understands the hip factor associated with branding.
Company distributor demographics vary based on product offerings as well as the market itself. Some companies skew older, some younger, but across the board direct selling appeals to the full generational spectrum.
Baby boomers, roughly age 48–66, make up the middle of Univera’s North American distributor bell curve, with Matures (over 67) and Gen X (33–47)/Gen Y (under 32) on either end, says President Randy Bancino. Univera’s average distributor age is 52.
A focus on health with Univera’s metabolic fitness products skews the company’s distributor base older. However, an opportunity to make a better future is also in the mix for Matures and baby boomers.
“We have a combination of people who are thinking about how much money they have for retirement and are looking for ways to supplement that nest egg, and people who are reinventing themselves. It’s kind of the second act of their career life. Our business allows people to explore that without jumping off a cliff,” Bancino says.
J.Hilburn’s stylist demographic, on the other hand, straddles Gen X and the baby boom. Co-Founder Hil Davis points out that custom men’s clothing is not a self-consumable product, which sets J.Hilburn up uniquely in direct selling. Their average stylist, between 35 and 55 years old, is first and foremost a salesperson, earning $20,000 a year in revenue by servicing 30–40 personal clients, which typically skew older due to product price point.
Jeunesse, a rapidly growing promoter of healthy living, also occupies this demographic. “We’re right there on the border of Gen X, and then depending upon the market we’re heading into the early years of the baby boomers,” Chief Visionary Officer Scott Lewis says.
But Jeunesse is a global company, and distributor trends vary by market. “In the U.S. we haven’t tapped into Gen Y. But in Thailand, for example, we have our youngest Diamond Director ever, and he is just 29 years old,” Lewis says.
Gen X and Gen Y are Initials Inc.’s “sweet spot,” says Britney Vickery, Co-Founder of the direct seller of personalized handbags and accessories. In fact, 95 percent of their Creative Partners are 25 to 45 years old. They are new to direct sales, and 86 percent have kids younger than 9. “It’s that former professional woman. It’s the one who might still have a job outside of the home. It’s one who might be looking for a job to stay home with children,” Vickery says.
Shifting Young: Is Gen Y the Answer?
While Gen Ys are often the go-to solution for growth there’s more to this demographic than just youth, and understanding why they behave as they do is the only way to truly see the wider opportunities at hand.
“It’s a natural thing to say, ‘How do we get young people?’ ” Bancino says. “But you have to be true to who you are. It depends on what product you are selling and your value proposition. You can’t appeal to a younger generation by just repackaging something that’s not really in their wheelhouse.”
Gen Ys, or the millennials, grew up in a precarious time for the United States. Suddenly terrorism was within arm’s reach inside the country. China breathed down our proverbial necks, altering global competition forever. Then the 2008 worldwide financial crisis pitted large-scale, traditional financial institutions and employers against Main Street and Mom and Dad. Unemployment rose sharply, career optimism shrunk and Gen Y absorbed it all.
Collectively, Gen Y responded in ways baby boomers didn’t understand. Those in this segment put their heads down and their fingers to work on smartphones, laptops and iPads, as cheap computer power let them share goods and information at record speed. They began idolizing the “geeks”—Steve Jobs, Sergey Brin, Mark Zuckerberg—who made it possible for them to depend less on corporate America and more upon themselves. Pretty soon Gen Y’s social connectivity—the ability to find, create, share, provide and get feedback—rose in value. They turned authenticity into virtual currency and began to influence the way people of every generation lived.
To misunderstanding eyes, Gen Ys look perpetually distracted. They have no focus. Noses buried in screens all day long, they play on Facebook, Twitter and Instagram. So an “us versus them” mentality surfaced among baby boom bosses who just didn’t get millennials. “This ‘us versus them’ mentality actually misses the entire point of the opportunity. What ‘they’ do is a shaping of behavior based on how behavior is evolving,” Solis says.
Disruptive technology like social media permeates the lives of Gen Y, and until companies better understand its impact on all customers and prospects, it will remain an “us versus them” expression.
“This is a big challenge because direct selling is often a very traditional business, similar to many traditional business models,” Solis says. “They can still look at demographics, and they may tend to look at trends like technology very reluctantly. But business as usual won’t thrive in an era dominated by ‘business unusual.’ ”
Gen C = Business Unusual
It turns out this younger generation was really just the catalyst that prompted the “business unusual” era. It’s the fast-approaching, multigenerational surge of connected consumers known as Generation C that wields even more potential power.
Fair warning to direct sellers: Disregarding or underestimating this different type of customer who lives online and is always connected will be bad for a company’s health.
Generation C is “anyone who places increasing emphasis on technology as part of their daily routine. In many ways, their behavior mimics that of millennials, and as a result, they prove elusive or immune to traditional marketing and service,” says Solis, who coined Gen C in his book The End of Business As Usual.
Gen Cs use smartphones to compare prices online while shopping in stores; browse products through websites or apps on their iPads while watching television; search for online reviews, coupons, and retail locations; and even scan barcodes for product and price information.
Look to Nielsen for proof that Gen C is upon us. Between 2002 and 2012, U.S. Internet access doubled from 132.2 million to 274 million. Smartphones dominated and laptops surpassed desktops for the first time.
IBM’s connectivity sampling of 1,056 people predictably lists Gen X and Gen Y leading, but baby boomers don’t lag far behind. Eighty percent report social-site online accounts. Regardless of age, people are connected to media sharing, microblogging and blogging sites, spending 81 billion minutes there in 2012, according to Nielsen.
“Boomers are, in many cases, as tech savvy as Gen X guys,” Bancino says. “Univera’s boomers are more likely to use email where Gen Xers text. They are all using technology, especially social media. I have more baby boomers on Facebook. I have more Gen X on Twitter. The technology is spreading across all of the groups.”
The Connected and the Not-So-Connected
Connectivity is the essence of Generation C, and for direct selling companies that are paying attention this is where everything begins to change. “You start to see that your customer actually is multidimensional and your customer isn’t just one audience anymore. You have the traditional customer, and now you have this connected customer. Where they go, how they talk, how they communicate, what they value is different in so many ways. You’re having to appeal to two different customer sets,” Solis says.
Amber Olson Rourke, Vice President of Marketing and Culture at Nerium International, says, “Traditional ways of doing things are not conducive to reaching all demographics. You have to be able to meet the needs of many types of customers today. You can’t just communicate by email and phone calls anymore. You have to change the format. Younger generations like to receive text message updates. They like to get blogs and podcasts and things they can digest easily when they have a few minutes of downtime.”
Vickery agrees: “The major shift we’re seeing, particularly within our demographic, is to electronic: Facebook and text messaging. They just want some things quickly.”
Never before has the customer journey been so complex, especially within the direct selling industry, where customer and distributor journeys run parallel. Direct selling companies must deliver product and business opportunity information in compelling fashion for connected consumers, while keeping their eye on an already existing traditional demographic. And that can get muddy.
“The better you can hone in to find who you are, the better your ability to go out and grab people who are attracted to that,” Vickery says. “Look at who you are, what you are trying to accomplish in the company. What is that vision you want to grow?”
Solis adds, “That’s a philosophical discussion, and that’s a discussion that takes vision and leadership qualities to just press pause and say, ‘How can we do all of this better?’ ”
“It’s not about millennials versus boomers versus Gen X. It’s about a series of profiles of customers. What they value, how they think, how they interact, where they interact.”
A metamorphosis is necessary for companies to engage both traditional and connected consumers. “This isn’t easy. This is really complicated stuff because what you’re starting to do is essentially change the very model of your organization and at the same time not completely upset it, but expand or augment it,” Solis says.
The first step is acceptance. Things are not as they used to be. Gen C and disruptive technology may have upset the status quo, but that is where opportunity lives. The second step is introspective analysis and digging deeply into the demographics of the connected consumer.
“When you start to profile your customers, you realize it’s not about him or her. It’s not about millennials versus boomers versus Gen X. It’s about a series of profiles of customers. What they value, how they think, how they interact, where they interact. You start to see they actually paint a series of personas that require product innovation, service and sales innovation, and marketing innovation because no one way reaches them and no one product appeals to every one of them,” Solis says.
The third step is finding the components to attract new customers and distributors in the smartest ways for both traditional and connected consumers.
A real fear for companies across all segments of business is falling victim to Digital Darwinism—where technology and society evolve faster than the ability of business to adapt.
Direct selling companies were some of the first to reimagine disruptive technologies like social media as tools for business growth. “It suited us. It suited the industry. It suited the way we did business. Our people figured out ways to utilize it to enhance their relationships and business-building activities,” Bancino says.
But Solis warns, “Businesses tend to think that they’re adapting because they are seeing an inflowing of social media strategy or they’re creating an app or trying new things. But the challenge here is in thinking technology is the solution.”
Vickery agrees: “I’m not going to be able to forge a great relationship with you if all we ever do is text, right? I need to be with you. I need to know who you are. I need to understand where you want to go with your business. You’ve got to teach people how to use technology smartly. You can’t hang out on Facebook all day and grow a successful business. You just can’t.”
But when business objectives are clear, properly harnessed social media tools are a competitive advantage. Jeunesse has a unique, patented sampling technology tied to social networking. “Literally right within Facebook, in the window where a free sample video is posted, it has an open shopping cart where consumers can enter their credit card info for shipping costs only and a shipping address,” Lewis says.
“It allows us to tap into any difference in generational groups because it can be offered through really any social media platform.” Facebook, Twitter, Instagram, YouTube and any number of international social media sites are all compatible.
Typically, online free samples open up a new URL once clicked, but consumers stay put with this Jeunesse technology. Keeping users glued to a familiar online environment makes social media companies happy and it makes life a little easier for consumers as well.
J.Hilburn’s online closet technology keeps its customers and distributors on the cutting edge of men’s fashion. “We build closet features where, as a customer, you go online and it builds outfits based on what you’ve bought in the past. Our customers always see what’s going to be relevant to them,” Davis says.
For J.Hilburn, the customer value proposition drives every decision. “It’s our first goal,” he says. “The benefit of direct sales is going directly to the customer so you can offer a better value proposition because you’re theoretically cutting out the distributor—the middleperson—and passing the savings along to the customer.”
They build customer relationships based on that strong customer value proposition. “The product is so compelling. Tell a guy he can get a custom-made tie and shirt for $89 and it sells. Where are you going to find that anywhere else in the world?” Davis says.
Where Belly-to-Belly Meets the Share Button
Ever advancing connectivity changes people from traditional consumers to connected ones, and as behavior changes so too must the direct selling approach to relationship building. Belly-to-belly relationships will always have a place in this industry, but the opportunity to instigate and nurture relationships in the online world has infinite advantages too; after all, direct selling’s power lies in sharing.
“Just think about how younger generations are growing up. I mean, they are growing up with the ‘share’ button,” Davis says. “They are actually able to find true like-for-likes, someone who pairs with their needs and their wants very well. The Internet makes that very, very achievable. It connects people that you wouldn’t normally have access to, and it serves up all the different things you can do in the world.”
Vickery says, “The majority of who we serve are women, and they are master mavens.” She loves identifying Initials Inc.’s Creative Partners as “mavens” because they so precisely meet author Malcolm Gladwell’s definition in The Tipping Point. “They connect people,” she says. “They can’t go shopping and get a good deal on something and not go home and tell five friends about it, right?”
The same thing happens online, but results are exponentially larger in a networked economy of connected consumers. “It’s this influence that changes the game for how consumers and organizations connect in the future,” Solis says.
Not that long ago, Univera’s baby boomers lamented their lack of digital savvy, but Bancino told them, “I frankly have never in all the years I’ve been in this industry seen anybody build a business by sitting at home in their jammies at their computer. It’s still a relationship kind of business, and technology has enhanced relationships, but in no way has it ever replaced relationships.”
Solis says, “This is actually, I think, a big moment in time where every business could go through an exercise to find greater relevance and meaning in what it is that they’re doing. As millennials arrive, and Generation Z behind them, and more everyday people just become more and more connected, it creates a sense of urgency.” He adds, “It’s not too late, but we are on the cusp of going into full-blown crisis mode, where we’re going to have to change from the inside out in order to not just stay in business, but grow in business. This is not an overnight thing. No one is threatened imminently, but ultimately, everybody’s threatened. “One of the inherent values of a direct selling organization is its focus on relationships from people to people because that is where technology is really going,” Solis says. “Technology is making us all a little bit more human even though it’s making us more digital at the same time. Direct sellers have that naturally built into the model. Now it’s just a matter of adapting that into a modern and constantly evolving era.”