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Veribella Appoints Johnna Johnson VP of Sales & Field Development

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Veribella, Inc., recently announced it has appointed Johnna Johnson vice president of Sales & Field Development.

Recruited by Hanna Shea Executive Search, Johnson brings nearly 25 years of experience in the direct sales industry. She financed her college education by selling lipsticks through her direct sales business—earning her way into the top 2 percent of the company—and went on to serve in high-level positions on the corporate side in several direct sales companies. Her programs and events have won multiple awards from the Direct Selling Association.

At Veribella, Johnson will oversee all functions in the sales and marketing departments that will provide Brand Partners with the tools, education, recognition and care they need to excel throughout the country.

Veribella Appoints Johnna Johnson VP of Sales & Field Development

by Leave a Comment

Veribella, Inc., recently announced it has appointed Johnna Johnson vice president of Sales & Field Development.

Recruited by Hanna Shea Executive Search, Johnson brings nearly 25 years of experience in the direct sales industry. She financed her college education by selling lipsticks through her direct sales business—earning her way into the top 2 percent of the company—and went on to serve in high-level positions on the corporate side in several direct sales companies. Her programs and events have won multiple awards from the Direct Selling Association.

At Veribella, Johnson will oversee all functions in the sales and marketing departments that will provide Brand Partners with the tools, education, recognition and care they need to excel throughout the country.

Turning Hope Into Reality

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HOPE HAS NEVER been—nor ever will be—a strategy. It will only get you so far before real work has to be done. In this month’s cover story, we tackle we talk about how our channel is at a crossroads. It can either stay on its current traditional path or evolve to what Gordon Hester, author of Positioned Right, calls the Next Generation Path, one that is more in line with the marketplace. “Our industry must resist marketing hope for something that most people won’t reach,” he says. “Hope is only valuable if it leads to results. We need to set realistic expectations if our goal is to keep them in the industry.

Just as many industries have taken a page from what our channel does best, our next feature story takes a look at how other industries grow their customer base. It starts with creating superfans of your company and product. The great Sam Walton said it best, “Exceed your customers’ expectations. If you do, they’ll come back over and over. Give them what they want and a little more.”

Next up, we are excited to have Boise, Idaho-based Damsel in Defense as our company spotlight this month. CEO Mindy Lin understands how paralyzing the statistics surrounding violence against women and children can feel—from the 1 in 10 children that will be sexually abused, to the 1 in 3 women who will experience violence at the hands of a partner. “We find that if your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it,” she says.

Lastly, CEO Gaya Samarasingha of two-year-old Kalaia, shares six lessons and strategies she has learned to help any direct selling through the startup phase and on a path to profitability. Since its launch in February 2018, the company has been able to build a solid foundation that allowed them to expand internationally; create consistent growth in the United States, and reach profitability within their first year.

We hope that your year is off to a great start, and we look forward to bringing you great content over the next few months that will help you do your job better. Have an idea for a feature story? Send it to us! We would love to hear from you.

DSN Global 100 Nominations Now Open!
As you close your books on 2019, don’t forget to submit your data for the Direct Selling News Global 100 list. This will be our eleventh year producing this list, which has become a benchmark for the channel, recognizing those select companies that hold a leadership position in the direct selling community worldwide.

Next, mark your calendar for April 1 and secure tickets for you and your team. This year’s Global 100 Celebration will take place at the Westin Irving Convention Center at Las Colinas (Dallas), a wonderful venue in which to celebrate the achievements from the past year and to recognize each of the companies making the list.

All the best,

Todd

Turning Hope Into Reality

by Leave a Comment

HOPE HAS NEVER been—nor ever will be—a strategy. It will only get you so far before real work has to be done. In this month’s cover story, we tackle we talk about how our channel is at a crossroads. It can either stay on its current traditional path or evolve to what Gordon Hester, author of Positioned Right, calls the Next Generation Path, one that is more in line with the marketplace. “Our industry must resist marketing hope for something that most people won’t reach,” he says. “Hope is only valuable if it leads to results. We need to set realistic expectations if our goal is to keep them in the industry.

Just as many industries have taken a page from what our channel does best, our next feature story takes a look at how other industries grow their customer base. It starts with creating superfans of your company and product. The great Sam Walton said it best, “Exceed your customers’ expectations. If you do, they’ll come back over and over. Give them what they want and a little more.”

Next up, we are excited to have Boise, Idaho-based Damsel in Defense as our company spotlight this month. CEO Mindy Lin understands how paralyzing the statistics surrounding violence against women and children can feel—from the 1 in 10 children that will be sexually abused, to the 1 in 3 women who will experience violence at the hands of a partner. “We find that if your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it,” she says.

Lastly, CEO Gaya Samarasingha of two-year-old Kalaia, shares six lessons and strategies she has learned to help any direct selling through the startup phase and on a path to profitability. Since its launch in February 2018, the company has been able to build a solid foundation that allowed them to expand internationally; create consistent growth in the United States, and reach profitability within their first year.

We hope that your year is off to a great start, and we look forward to bringing you great content over the next few months that will help you do your job better. Have an idea for a feature story? Send it to us! We would love to hear from you.

DSN Global 100 Nominations Now Open!
As you close your books on 2019, don’t forget to submit your data for the Direct Selling News Global 100 list. This will be our eleventh year producing this list, which has become a benchmark for the channel, recognizing those select companies that hold a leadership position in the direct selling community worldwide.

Next, mark your calendar for April 1 and secure tickets for you and your team. This year’s Global 100 Celebration will take place at the Westin Irving Convention Center at Las Colinas (Dallas), a wonderful venue in which to celebrate the achievements from the past year and to recognize each of the companies making the list.

All the best,

Todd

Q&A with Gordon Hester

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THE WORLD IS CHANGING AT A FASTER PACE THAN AT ANY TIME IN HISTORY. The need for any leader, company, or industry to seek relevancy and leadership in the marketplace has never been greater. The direct selling industry is no exception to this reality. The competition for consumers requires us to be reimagine how we will continue to be a proven and meaningful distribution channel. I recently had the opportunity to speak with Gordon Hester on his insightful new book.

You have a new book called Positioned Right: The Forces Shaping the Future of Direct Selling and Network Marketing. Share with us what the book is about and why you wrote it?

Two and a half years ago, and seven full rewrites later, it came about because I started recognizing what I believe was an inflection point in our channel. You can only ride the wave for so long because, at some point, you realize that change is necessary and required. In my opinion, we are positioned right as a distribution channel and an opportunity for the future. It’s hard to argue you’re not when you’re in over 170 countries, over 120 million entrepreneurs using this business model, and doing over $200 billion in sales globally.

The whole first part of the book was letting people understand what both direct selling and what network marketing are all about. I’m an educator by nature, and I believe it’s important for people to be educated about who we are all about. The rest of the book is really focused on the evolution—the big areas we have to focus on. What are they?

  • It starts with perception. How do we get the marketplace to have more raving brand ambassadors for the industry?
  • Next, is focusing on improving the customer and distributor experience and journey.
  • The last piece is culture—which I think culture is the ultimate differentiator in our business.

How do we as a channel adapt to this changing world?

We look at our channel in two components, one being the distribution channel, and the other being the opportunity. There’s obviously a lot of talk about the regulatory environment and what’s going on there. I noticed that the inflection point was the marketplace had evolved to a point where we had to change. If you went back ten years ago, there was no Amazon that was doing what they’re doing today, and the e-commerce component, that distribution channel wasn’t what it was today. So how consumers behave, how they shop, the tools they are given have all changed. I feel that as an industry we have fallen behind, and as a distribution channel we can do a better job.

To me, the best indicator of this is just go look at the number of customers we lose and how quickly we lose them. This is important to fix. We always have to be competing for customers because it’s the foundation of direct selling. I always tell people—no customer base, no business. That’s just reality number one of business.

We have to understand that our business isn’t about marketing hope, the next generation of the process is we have to be able to execute on
fulfilling that hope.

On the opportunity side of things, in 2017 and 2018 in the U.S. the industry lost over 2 million people. Part of that was segmentation and other issues. But you also have to look at ‘who’ we were losing in the industry. It is our part-timers, the micro-entrepreneurs, the lifeblood of our channel. With any established company, these are the people who are going to bring in over 90 percent of your sales, 90 percent of your customer acquisition and 90 percent of your recruiting.

So, when the things that are foundational stop working, you have to take a hard look at how do you go and get positioned to evolve this industry. And the book for me was step one. I think our industry right now is paying a lot of attention to the importance of evolving, and that’s a good thing. Now the question is how.

 “Either the pursuit of relevancy and leadership in the marketplace will define the future of direct selling, or inaction will create limitations—not focusing all energy on fighting the old, but on building the new.” Tell us what this quote from your book means.

You can get caught up in the turbulence of the present and fail to invest your energy in the creating of the future. I think a lot of people in our channel know we have to evolve, but there are different levels of commitment for different companies. But ultimately, what matters about that commitment is how committed you are to it. Everyone says we need to change. They just want to take any risks to get there, so they just dip their toes in the water. I think our industry honestly is very intuitive based, meaning they’re going to rely on past experiences. As soon as a big obstacle comes, they tend to want to pivot backward.

I remember Tony Robbins saying there is that moment in time where you decide you’re never going back. It’s that resolve. There’s always going to be headwinds. This is a reality in evolving businesses and cultures.

You share what you call the Historical Path versus the Next Generation path. Please explain the difference and why we need to choose the Next Generation path.

If you go back to the beginning, direct selling began when a preacher by the name of Graves began selling books door to door. The industry took a big turn in the mid-40s when all of a sudden, these people were allowed to hire other people to help sell their inventory on a quota-based system. It was this process of if I’m successful in bringing customers, then at some point when I get enough customers, I can come become a distributor, too. That was the beginning of network marketing.

Another big change happened in the 70s. Companies would present big checks on stage, and there was a lot of emphasis around money. That’s when we had the birth of the opportunity centric model where the opportunity drove the business and when the compensation plans started shifting differently.

At the core of this is ‘Hope Marketing,’ it’s the kind of marketing that is about getting people excited about the transformation of their lifestyle. It is about being more comfortable, having more freedom and making more impact. These are the kind of examples of what you market hope around, but ultimately, successful businesses are those that turn hope into reality. And what our industry is really big on is marketing hope. The path forward is to climb the marketing plan. The more people that climb it. The more successful it is.

If you look at it in practice, what gets lost is the execution necessary to turn hope into reality. We have to understand that our business isn’t about marketing hope. The next generation of the process is that we have to be able to execute on fulfilling that hope. We need to get into the execution, engagement and relationship building game. This needs to define us, and we need to do better in all of these areas.

The Historical Path of marketing hope, chasing the career path worked well for many decades because recruiting solved all problems, and now it doesn’t. We are starting to see the evolution away from that. So, when I talk about ‘Next Generation,’ it’s talking about getting back to the concept of the customer experience and customer journey. It works off of a principle I call, Relationship Stacking, where the foundation of our business is customers. No customers mean—no business. Then there are these micro-entrepreneurs. 80 percent of these individuals will never build a team, so they have to be able to succeed through retailing product, in particular, to end consumers. If you can do that effectively, what you can do is establish strong leadership.

Next Generation is built around that thinking of customer growth. To do that, we’ve got to take care of our part-time micro-entrepreneurs and make sure that we can addict them to this business model and make sure that they’re successful.

To me, Next Generation, is much bigger than just this pendulum between opportunity and product. I think the future will be more of a cultural centric model where a company’s culture is so strong that people won’t leave it because their identity is tied to it. If we do this well, the decade-long debate of do we lead with the opportunity or product goes away because we have built a culture around a larger mission that everyone can wrap their arms around.

Q&A with Gordon Hester

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THE WORLD IS CHANGING AT A FASTER PACE THAN AT ANY TIME IN HISTORY. The need for any leader, company, or industry to seek relevancy and leadership in the marketplace has never been greater. The direct selling industry is no exception to this reality. The competition for consumers requires us to be reimagine how we will continue to be a proven and meaningful distribution channel. I recently had the opportunity to speak with Gordon Hester on his insightful new book.

You have a new book called Positioned Right: The Forces Shaping the Future of Direct Selling and Network Marketing. Share with us what the book is about and why you wrote it?

Two and a half years ago, and seven full rewrites later, it came about because I started recognizing what I believe was an inflection point in our channel. You can only ride the wave for so long because, at some point, you realize that change is necessary and required. In my opinion, we are positioned right as a distribution channel and an opportunity for the future. It’s hard to argue you’re not when you’re in over 170 countries, over 120 million entrepreneurs using this business model, and doing over $200 billion in sales globally.

The whole first part of the book was letting people understand what both direct selling and what network marketing are all about. I’m an educator by nature, and I believe it’s important for people to be educated about who we are all about. The rest of the book is really focused on the evolution—the big areas we have to focus on. What are they?

  • It starts with perception. How do we get the marketplace to have more raving brand ambassadors for the industry?
  • Next, is focusing on improving the customer and distributor experience and journey.
  • The last piece is culture—which I think culture is the ultimate differentiator in our business.

How do we as a channel adapt to this changing world?

We look at our channel in two components, one being the distribution channel, and the other being the opportunity. There’s obviously a lot of talk about the regulatory environment and what’s going on there. I noticed that the inflection point was the marketplace had evolved to a point where we had to change. If you went back ten years ago, there was no Amazon that was doing what they’re doing today, and the e-commerce component, that distribution channel wasn’t what it was today. So how consumers behave, how they shop, the tools they are given have all changed. I feel that as an industry we have fallen behind, and as a distribution channel we can do a better job.

To me, the best indicator of this is just go look at the number of customers we lose and how quickly we lose them. This is important to fix. We always have to be competing for customers because it’s the foundation of direct selling. I always tell people—no customer base, no business. That’s just reality number one of business.

We have to understand that our business isn’t about marketing hope, the next generation of the process is we have to be able to execute on
fulfilling that hope.

On the opportunity side of things, in 2017 and 2018 in the U.S. the industry lost over 2 million people. Part of that was segmentation and other issues. But you also have to look at ‘who’ we were losing in the industry. It is our part-timers, the micro-entrepreneurs, the lifeblood of our channel. With any established company, these are the people who are going to bring in over 90 percent of your sales, 90 percent of your customer acquisition and 90 percent of your recruiting.

So, when the things that are foundational stop working, you have to take a hard look at how do you go and get positioned to evolve this industry. And the book for me was step one. I think our industry right now is paying a lot of attention to the importance of evolving, and that’s a good thing. Now the question is how.

 “Either the pursuit of relevancy and leadership in the marketplace will define the future of direct selling, or inaction will create limitations—not focusing all energy on fighting the old, but on building the new.” Tell us what this quote from your book means.

You can get caught up in the turbulence of the present and fail to invest your energy in the creating of the future. I think a lot of people in our channel know we have to evolve, but there are different levels of commitment for different companies. But ultimately, what matters about that commitment is how committed you are to it. Everyone says we need to change. They just want to take any risks to get there, so they just dip their toes in the water. I think our industry honestly is very intuitive based, meaning they’re going to rely on past experiences. As soon as a big obstacle comes, they tend to want to pivot backward.

I remember Tony Robbins saying there is that moment in time where you decide you’re never going back. It’s that resolve. There’s always going to be headwinds. This is a reality in evolving businesses and cultures.

You share what you call the Historical Path versus the Next Generation path. Please explain the difference and why we need to choose the Next Generation path.

If you go back to the beginning, direct selling began when a preacher by the name of Graves began selling books door to door. The industry took a big turn in the mid-40s when all of a sudden, these people were allowed to hire other people to help sell their inventory on a quota-based system. It was this process of if I’m successful in bringing customers, then at some point when I get enough customers, I can come become a distributor, too. That was the beginning of network marketing.

Another big change happened in the 70s. Companies would present big checks on stage, and there was a lot of emphasis around money. That’s when we had the birth of the opportunity centric model where the opportunity drove the business and when the compensation plans started shifting differently.

At the core of this is ‘Hope Marketing,’ it’s the kind of marketing that is about getting people excited about the transformation of their lifestyle. It is about being more comfortable, having more freedom and making more impact. These are the kind of examples of what you market hope around, but ultimately, successful businesses are those that turn hope into reality. And what our industry is really big on is marketing hope. The path forward is to climb the marketing plan. The more people that climb it. The more successful it is.

If you look at it in practice, what gets lost is the execution necessary to turn hope into reality. We have to understand that our business isn’t about marketing hope. The next generation of the process is that we have to be able to execute on fulfilling that hope. We need to get into the execution, engagement and relationship building game. This needs to define us, and we need to do better in all of these areas.

The Historical Path of marketing hope, chasing the career path worked well for many decades because recruiting solved all problems, and now it doesn’t. We are starting to see the evolution away from that. So, when I talk about ‘Next Generation,’ it’s talking about getting back to the concept of the customer experience and customer journey. It works off of a principle I call, Relationship Stacking, where the foundation of our business is customers. No customers mean—no business. Then there are these micro-entrepreneurs. 80 percent of these individuals will never build a team, so they have to be able to succeed through retailing product, in particular, to end consumers. If you can do that effectively, what you can do is establish strong leadership.

Next Generation is built around that thinking of customer growth. To do that, we’ve got to take care of our part-time micro-entrepreneurs and make sure that we can addict them to this business model and make sure that they’re successful.

To me, Next Generation, is much bigger than just this pendulum between opportunity and product. I think the future will be more of a cultural centric model where a company’s culture is so strong that people won’t leave it because their identity is tied to it. If we do this well, the decade-long debate of do we lead with the opportunity or product goes away because we have built a culture around a larger mission that everyone can wrap their arms around.

Damsel in Defense: Transforming Pain into Purpose

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Damsel in Defense
Founded: 2011
Headquarters: Boise, ID
Top Executive: Mindy Lin, CEO
Products: Self defense products and educational materials

The invisible, slow healing wounds of sexual violence and domestic abuse often shape the way a woman sees herself, her future and the world around her. But what if that tragedy could be redeemed in some way? Or prevented altogether.

Damsel in Defense CEO Mindy Lin understands how paralyzing the statistics surrounding violence against women and children can feel—from the 1 out of 4 girls that will be sexually abused as a child, to the 1 in 3 women who will experience violence at the hands of a partner.

“In the world that we live in and with the statistics what they are, it’s overwhelming to feel like you can make a difference,” Lin explains. “It feels like you turn on the news every day and it makes you question, ‘What am I doing? Am I even making a difference?”

At first glance, it would seem that the Damsel in Defense line of products is a response to those statistics, as it offers stun guns, pepper sprays and other self defense tools. But the statistics aren’t what motivates Lin and her team. It’s the one. The one woman who has survived sexual assault. The one child whose abuse could be prevented. The one brave enough to walk away from an abusive partner. She calls them starfish.

“Have you ever heard the story of the starfish?” she asks and then begins:

An old man walks down the shoreline, and he sees a little boy frantically running back and forth from the sand to the water. As the man gets closer, he sees that there are hundreds of thousands of starfish that have washed up onto the shore. And this boy is still running back and forth, back and forth. The man realizes, ‘Oh no, this kid doesn’t even realize what he’s up against.’ He walks up to him and asks ‘Young man, what are you doing?’ The little boy answers, panicked, ‘I’m throwing back the starfish that got washed up onto the shore.’

The old man sees the impossibility of this and says, ‘Young man, there are hundreds of thousands of starfish here. There is only one of you. I hate to tell you this, but you surely are not going to be able to make a difference here.’

The little boy turns back towards the thousands of starfish, picks one up, throws it back in the sea and says, ‘But I made a difference to that one.’

An Empowered Field

 Alongside her husband Jimmy in the role of CFO, Lin empowers a team of Independent Damsel Pros that isn’t defined by the typical demographics used to describe direct sales field operations.

“Seventy-eight percent of my field has a story of sexual assault or domestic violence or violent trauma that has happened their lives to them or someone that they love,” shares Lin.

“We find that if your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it,” she says. “We celebrate the starfishes we meet. One may need the mission. One may need the opportunity. One may need the protection. To give every Pro something to put into another’s hands to prevent her from being that next statistic makes a great effort worth it. They find the ability to take the pain from the past and channel it into purpose.”

Prospective Damsel Pros can join the company in one of two ways—through a low-cost, $20 starter kit with one product or a larger starter kit featuring a curated collection of products for $99. Both starter kits provide a new Pro with access to online training.

The Damsel opportunity is often more than a new business for Damsel Pros—it can be a fresh start.

If your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it.

“We’re creating an opportunity for women to see that they have the ability to financially remove themselves from threatening circumstances,” she explains. “So, it’s not just the emotional empowerment that comes from finding this community, but also the financial empowerment to say ‘No more.’”

Protect to Prevent

 Since Damsel’s launch in 2011, the product line has expanded from stun guns and pepper spray to technology-enhanced selfdefense tools and a line of educational materials for parents and children.

“The vision I’ve had for quite a while now is how do we create a defense that’s just one click away,” says Lin. “The goal has always been to create a network of products that all work together and communicate with our loved ones.”

After four years in development, Damsel in Defense launched the first product with its proprietary Shield Technology in October 2019. An enhanced version of the company’s popular Protected Pepper Spray, this new product includes a button that, when pushed, sends communication to five preselected contacts in your phone, letting them know that you’re in danger, you’ve deployed your pepper spray and alerting them to your location so that they can send help.

“Shield Technology was a long time coming,” shares Lin. “It was a lot of work with a lot of vision and dreaming that went into it. We launched it and sold out in six weeks. We’re restocking that and will be offering that (technology) in future products as we grow.”

Damsel’s self-defense tools aren’t the only way Lin and her team are serving the “one.”

“The products that we carry currently protect women that are of age to be able to carry protection,” she says. “But at eight years old, those products wouldn’t have changed my circumstances.”

A victim of childhood molestation herself, Lin saw the glaring lack of adequate prevention education for parents and their children. “My parents had the stranger danger conversations with me, but they never had the friends and family member conversation,” she recounts.

In 2015, Damsel launched the SAFE Hearts Collection—a line of children’s books, a parent guide and family board game—intended to educate families through age-appropriate “kid-versations” that offer scenarios to discuss and learn from.

There’s a gamut of subjects that are covered in a way that if parents don’t know how to navigate them, they simply have to open up the book and use the questions at the back says Lin. “The kids can answer the questions with their parents with opportunities for role-playing so that they can cement in those concepts and conversations. Since we launched the line, we’ve received so many stories of parents that have uncovered abuse and the children that have been empowered by this content and reported on potential aggressors. I wanted my story to have purpose. It’s been a very, very rewarding project.”

Moving Forward

 With over 7,500 active Damsel Pros in the field and a busy home office team of 25, Damsel in Defense continues to grow in ways of both outreach and innovation.

New products are in development with inspiration from Damsel Pros themselves. Every customer has a different environment and specific protection need, giving Lin and her in-house engineering team a broad canvas to create on.

The products that we carry currently protect women that are of age to be able to carry protection. But at eight years old, those products wouldn’t have done me any good.

“We always tell our consultants to tailor their protection to the needs of their customers,” says Lin. “For example, an airline attendant, she can’t carry pepper spray onto an aircraft. So, what can she take? She just has a carry on. So what product can you provide her? So, it really is a tailoring conversation and there’s so much creativity that comes out of that. Our best market research and ideation comes from our field. And we have an incredible engineer in house that has an innate knack for this stuff.”

Lin has goals for her team, the product line and the larger reach of Damsel in Defense, which includes The Damsel House Project, the company’s philanthropic strategy to battle sex trafficking. The project funds homes for women and girls rescued from the sex trade and to date is operating in both India and Cambodia, with more homes planned. “My longterm goal is for Damsel to have a rescue home in every country that our partners are operating in,” she says. “We currently have two homes, and I’m very driven and itchy to open our third home.”

Adhering to its mission to equip, empower and educate women and families across the country, the Damsel team moves forward, pursuing one “starfish” at a time.

“Everything we do gets passed through the lens of our mission, everything,” says Lin. “We want to continue to pass everything through that lens, diversifying our product offerings to protect more people, and make sure that no matter what product they reach for, that’s it’s capable of saving their life and sending for help. We want to continue to meet the needs of our sales force and meet customers where they’re at, doing everything in a way that we remain debt-free, privately-held and family-owned.”

Damsel in Defense: Transforming Pain into Purpose

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Damsel in Defense
Founded: 2011
Headquarters: Boise, ID
Top Executive: Mindy Lin, CEO
Products: Self defense products and educational materials

The invisible, slow healing wounds of sexual violence and domestic abuse often shape the way a woman sees herself, her future and the world around her. But what if that tragedy could be redeemed in some way? Or prevented altogether.

Damsel in Defense CEO Mindy Lin understands how paralyzing the statistics surrounding violence against women and children can feel—from the 1 out of 4 girls that will be sexually abused as a child, to the 1 in 3 women who will experience violence at the hands of a partner.

“In the world that we live in and with the statistics what they are, it’s overwhelming to feel like you can make a difference,” Lin explains. “It feels like you turn on the news every day and it makes you question, ‘What am I doing? Am I even making a difference?”

At first glance, it would seem that the Damsel in Defense line of products is a response to those statistics, as it offers stun guns, pepper sprays and other self defense tools. But the statistics aren’t what motivates Lin and her team. It’s the one. The one woman who has survived sexual assault. The one child whose abuse could be prevented. The one brave enough to walk away from an abusive partner. She calls them starfish.

“Have you ever heard the story of the starfish?” she asks and then begins:

An old man walks down the shoreline, and he sees a little boy frantically running back and forth from the sand to the water. As the man gets closer, he sees that there are hundreds of thousands of starfish that have washed up onto the shore. And this boy is still running back and forth, back and forth. The man realizes, ‘Oh no, this kid doesn’t even realize what he’s up against.’ He walks up to him and asks ‘Young man, what are you doing?’ The little boy answers, panicked, ‘I’m throwing back the starfish that got washed up onto the shore.’

The old man sees the impossibility of this and says, ‘Young man, there are hundreds of thousands of starfish here. There is only one of you. I hate to tell you this, but you surely are not going to be able to make a difference here.’

The little boy turns back towards the thousands of starfish, picks one up, throws it back in the sea and says, ‘But I made a difference to that one.’

An Empowered Field

 Alongside her husband Jimmy in the role of CFO, Lin empowers a team of Independent Damsel Pros that isn’t defined by the typical demographics used to describe direct sales field operations.

“Seventy-eight percent of my field has a story of sexual assault or domestic violence or violent trauma that has happened their lives to them or someone that they love,” shares Lin.

“We find that if your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it,” she says. “We celebrate the starfishes we meet. One may need the mission. One may need the opportunity. One may need the protection. To give every Pro something to put into another’s hands to prevent her from being that next statistic makes a great effort worth it. They find the ability to take the pain from the past and channel it into purpose.”

Prospective Damsel Pros can join the company in one of two ways—through a low-cost, $20 starter kit with one product or a larger starter kit featuring a curated collection of products for $99. Both starter kits provide a new Pro with access to online training.

The Damsel opportunity is often more than a new business for Damsel Pros—it can be a fresh start.

If your story and your trauma can give you an opportunity to go out and prevent what happened to you from happening to one person, then it was worth it.

“We’re creating an opportunity for women to see that they have the ability to financially remove themselves from threatening circumstances,” she explains. “So, it’s not just the emotional empowerment that comes from finding this community, but also the financial empowerment to say ‘No more.’”

Protect to Prevent

 Since Damsel’s launch in 2011, the product line has expanded from stun guns and pepper spray to technology-enhanced selfdefense tools and a line of educational materials for parents and children.

“The vision I’ve had for quite a while now is how do we create a defense that’s just one click away,” says Lin. “The goal has always been to create a network of products that all work together and communicate with our loved ones.”

After four years in development, Damsel in Defense launched the first product with its proprietary Shield Technology in October 2019. An enhanced version of the company’s popular Protected Pepper Spray, this new product includes a button that, when pushed, sends communication to five preselected contacts in your phone, letting them know that you’re in danger, you’ve deployed your pepper spray and alerting them to your location so that they can send help.

“Shield Technology was a long time coming,” shares Lin. “It was a lot of work with a lot of vision and dreaming that went into it. We launched it and sold out in six weeks. We’re restocking that and will be offering that (technology) in future products as we grow.”

Damsel’s self-defense tools aren’t the only way Lin and her team are serving the “one.”

“The products that we carry currently protect women that are of age to be able to carry protection,” she says. “But at eight years old, those products wouldn’t have changed my circumstances.”

A victim of childhood molestation herself, Lin saw the glaring lack of adequate prevention education for parents and their children. “My parents had the stranger danger conversations with me, but they never had the friends and family member conversation,” she recounts.

In 2015, Damsel launched the SAFE Hearts Collection—a line of children’s books, a parent guide and family board game—intended to educate families through age-appropriate “kid-versations” that offer scenarios to discuss and learn from.

There’s a gamut of subjects that are covered in a way that if parents don’t know how to navigate them, they simply have to open up the book and use the questions at the back says Lin. “The kids can answer the questions with their parents with opportunities for role-playing so that they can cement in those concepts and conversations. Since we launched the line, we’ve received so many stories of parents that have uncovered abuse and the children that have been empowered by this content and reported on potential aggressors. I wanted my story to have purpose. It’s been a very, very rewarding project.”

Moving Forward

 With over 7,500 active Damsel Pros in the field and a busy home office team of 25, Damsel in Defense continues to grow in ways of both outreach and innovation.

New products are in development with inspiration from Damsel Pros themselves. Every customer has a different environment and specific protection need, giving Lin and her in-house engineering team a broad canvas to create on.

The products that we carry currently protect women that are of age to be able to carry protection. But at eight years old, those products wouldn’t have done me any good.

“We always tell our consultants to tailor their protection to the needs of their customers,” says Lin. “For example, an airline attendant, she can’t carry pepper spray onto an aircraft. So, what can she take? She just has a carry on. So what product can you provide her? So, it really is a tailoring conversation and there’s so much creativity that comes out of that. Our best market research and ideation comes from our field. And we have an incredible engineer in house that has an innate knack for this stuff.”

Lin has goals for her team, the product line and the larger reach of Damsel in Defense, which includes The Damsel House Project, the company’s philanthropic strategy to battle sex trafficking. The project funds homes for women and girls rescued from the sex trade and to date is operating in both India and Cambodia, with more homes planned. “My longterm goal is for Damsel to have a rescue home in every country that our partners are operating in,” she says. “We currently have two homes, and I’m very driven and itchy to open our third home.”

Adhering to its mission to equip, empower and educate women and families across the country, the Damsel team moves forward, pursuing one “starfish” at a time.

“Everything we do gets passed through the lens of our mission, everything,” says Lin. “We want to continue to pass everything through that lens, diversifying our product offerings to protect more people, and make sure that no matter what product they reach for, that’s it’s capable of saving their life and sending for help. We want to continue to meet the needs of our sales force and meet customers where they’re at, doing everything in a way that we remain debt-free, privately-held and family-owned.”

Kalaia: From Startup to Profitability

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CEO Gaya Samarasingha’s shares six lessons and strategies learned.

 As we celebrate Kalaia’s second anniversary and the launch of our first international market (Australia), it is humbling to look back on our journey thus far. Since the launch in February 2018, we have been able to build a solid foundation that allowed us to expand internationally; create consistent growth in the United States; and most importantly reach profitability within our first year. I’m honored to be asked to share some of the lessons learned and strategies that contributed to our success over the last two years.

Your independent sales force is the backbone of your success. At Kalaia, we make decisions every day asking ourselves, “how can we better serve our Brand partners and help them grow their businesses?

1. Money matters but where money comes from matters even more.

One of the best decisions I made was to fund Kalaia on my own without any partners or inventors. It gave me the freedom to invest our time and resources with a focus on the long-term goals instead of the short-term gains. No matter how much you plan, every new business is unpredictable in nature, but the direct selling industry has its own set of unique challenges, seasonality, and other factors that play a huge role in how the first few years play out. As important as it is to have enough capital to start the business, I’m a big believer, it is important to partner with people who understand and appreciate this industry.

2. Scalability will give you longevity.

I have seen many companies make the mistake of getting the big office and hiring a full executive team before they recruit their first distributor or make their first sale. For us being scalable and lean has been a priority from day one. We outsource almost everything except few core functions and in most cases, we opt in to using freelance/contract staff instead of hiring full-time employees. They have become an extension of our corporate team. This has allowed us to scale our operations up or down based on the seasonality and given us the ability to maintain a healthy cash-flow. That being said, we have also been very selective in choosing vendors/business partners who understands the direct selling industry and have the capabilities to scale with us as we grow and expand globally.

3. Keep it simple, you cannot be everything to everyone.

I think this is true regardless of the size or the maturity of the business. In this industry it is so easy to be pressured into following the latest product trends or feeling the need to offer something for everyone. For young companies with limited resources it is critical to focus on quality over quantity when it comes to everything from products, promotions, to expansion strategies. Keep a pulse on what’s happening around you but don’t lose sight of who you are as a company trying to please everyone.

4. Technology isn’t the answer to everything, but it is a fundamental piece of the puzzle.

Like many, we thought having advanced technology would be critical to our business. We launched Kalaia with an app that integrated with our system to quickly find out majority of the Brand Partners, especially those less than part-timers, weren’t utilizing those tools. All they want is a simple platform to manage their business. Currently, we have an outstanding technology partner that provides us a simple platform that works. The key phase here is “a platform that works”. I have repeatedly seen how companies lose sales and even worse, lose the trust of their sales force because their systems fail to deliver. It is more important to have a simple system that works than having a broken system with all the bells and whistles.

5. Have a passion and love for the industry.

Many people with innovative product ideas choose Direct Selling as their platform to bring their product to market simply because they have seen others do it. But they don’t understand nor have an appreciation for what this industry stands for. They don’t understand what it takes to continue the growth when the newness of that product wears out. Hence, we have seen so many new Direct Selling companies come and go. One of my biggest advice to anyone considering the start of their own Direct Selling company is to either surround yourself with people with the industry experience or take the time to learn what makes or breaks companies in this industry, which leads me to my last and probably the most important point…

6. Your biggest asset is your independent sales force.

Sometimes we tend to forget the biggest asset of any company in this industry is the independent sales force. No matter how innovative your products are, how incredible your technology is, how creative your marketing is, this is a relationship business. Your independent sales force is the backbone of your success. At Kalaia, we make decisions every day asking ourselves “how can we better serve our Brand partners and help them grow their businesses?”. We continue to invest in the personal and professional development of our Brand Partners; we have given them a voice at the table through a very active Advisory Board; and we have created a rich culture that not only attracts but also develops savvy businesswomen and men.

We are incredibly blessed to have the women and men who have partnered with us as Brand Partners, employees, freelancers, and service providers to contribute to the ongoing success of Kalaia. We wouldn’t be here today without an amazing team that has come together to support our mission to empower women and change lives through our products, business opportunity, and the Kalaia Cares charitable program.

Kalaia: From Startup to Profitability

by Leave a Comment

CEO Gaya Samarasingha’s shares six lessons and strategies learned.

 As we celebrate Kalaia’s second anniversary and the launch of our first international market (Australia), it is humbling to look back on our journey thus far. Since the launch in February 2018, we have been able to build a solid foundation that allowed us to expand internationally; create consistent growth in the United States; and most importantly reach profitability within our first year. I’m honored to be asked to share some of the lessons learned and strategies that contributed to our success over the last two years.

Your independent sales force is the backbone of your success. At Kalaia, we make decisions every day asking ourselves, “how can we better serve our Brand partners and help them grow their businesses?

1. Money matters but where money comes from matters even more.

One of the best decisions I made was to fund Kalaia on my own without any partners or inventors. It gave me the freedom to invest our time and resources with a focus on the long-term goals instead of the short-term gains. No matter how much you plan, every new business is unpredictable in nature, but the direct selling industry has its own set of unique challenges, seasonality, and other factors that play a huge role in how the first few years play out. As important as it is to have enough capital to start the business, I’m a big believer, it is important to partner with people who understand and appreciate this industry.

2. Scalability will give you longevity.

I have seen many companies make the mistake of getting the big office and hiring a full executive team before they recruit their first distributor or make their first sale. For us being scalable and lean has been a priority from day one. We outsource almost everything except few core functions and in most cases, we opt in to using freelance/contract staff instead of hiring full-time employees. They have become an extension of our corporate team. This has allowed us to scale our operations up or down based on the seasonality and given us the ability to maintain a healthy cash-flow. That being said, we have also been very selective in choosing vendors/business partners who understands the direct selling industry and have the capabilities to scale with us as we grow and expand globally.

3. Keep it simple, you cannot be everything to everyone.

I think this is true regardless of the size or the maturity of the business. In this industry it is so easy to be pressured into following the latest product trends or feeling the need to offer something for everyone. For young companies with limited resources it is critical to focus on quality over quantity when it comes to everything from products, promotions, to expansion strategies. Keep a pulse on what’s happening around you but don’t lose sight of who you are as a company trying to please everyone.

4. Technology isn’t the answer to everything, but it is a fundamental piece of the puzzle.

Like many, we thought having advanced technology would be critical to our business. We launched Kalaia with an app that integrated with our system to quickly find out majority of the Brand Partners, especially those less than part-timers, weren’t utilizing those tools. All they want is a simple platform to manage their business. Currently, we have an outstanding technology partner that provides us a simple platform that works. The key phase here is “a platform that works”. I have repeatedly seen how companies lose sales and even worse, lose the trust of their sales force because their systems fail to deliver. It is more important to have a simple system that works than having a broken system with all the bells and whistles.

5. Have a passion and love for the industry.

Many people with innovative product ideas choose Direct Selling as their platform to bring their product to market simply because they have seen others do it. But they don’t understand nor have an appreciation for what this industry stands for. They don’t understand what it takes to continue the growth when the newness of that product wears out. Hence, we have seen so many new Direct Selling companies come and go. One of my biggest advice to anyone considering the start of their own Direct Selling company is to either surround yourself with people with the industry experience or take the time to learn what makes or breaks companies in this industry, which leads me to my last and probably the most important point…

6. Your biggest asset is your independent sales force.

Sometimes we tend to forget the biggest asset of any company in this industry is the independent sales force. No matter how innovative your products are, how incredible your technology is, how creative your marketing is, this is a relationship business. Your independent sales force is the backbone of your success. At Kalaia, we make decisions every day asking ourselves “how can we better serve our Brand partners and help them grow their businesses?”. We continue to invest in the personal and professional development of our Brand Partners; we have given them a voice at the table through a very active Advisory Board; and we have created a rich culture that not only attracts but also develops savvy businesswomen and men.

We are incredibly blessed to have the women and men who have partnered with us as Brand Partners, employees, freelancers, and service providers to contribute to the ongoing success of Kalaia. We wouldn’t be here today without an amazing team that has come together to support our mission to empower women and change lives through our products, business opportunity, and the Kalaia Cares charitable program.

Time for a Remodel

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How and why you need to put your customers ahead of your opportunity.

Do you want fries with that?” The classic upsell line. It works at McDonald’s because customers are already buying food, so the odds that they’ll want a little bit more food are good. But when direct selling customers hear “Would you like a business building opportunity with that?” it doesn’t have the same ring, because most of them are shopping for products, not a job selling those products.

The statistics bear this out: There are about six times as many retail customers (36.6 million)

in our industry as there are business builders (6.2 million), according to Direct Selling Association (DSA) Growth & Outlook research. Eighty-seven percent of direct sellers are part-time with many of those not interested in building downlines according to DSA research. And direct selling analyst Gordon Hester says, that among those who do consider becoming distributors, 80 percent of them ultimately are “unwilling or unable to build an organization.” But we can be a stubborn industry. “We too often try to turn customers into business builders,” Hester writes in his new book Positioned Right: The Forces Shaping the Future of Direct Selling and Network Marketing.

The mantra for this new decade must be, “We are a customer-centric industry.

In the book, Hester urges direct selling companies to move from the “Historical Path” to the “Next Generation Path.” The Historical Path is built on the “But we’ve always done it that way” mentality. Companies on this path cling to the status quo while competitors (in this and other industries) embrace new ways of thinking and operating. One of the hardest status quo habits for our industry to break (or at least loosen our grip on) is leading with the opportunity. Hester calls it “hope marketing,” in which we focus too much on the opportunity and the aspirational elements of being a distributor and not enough on what our products mean to customers.

Companies on the Next Generation Path, however, are all about what it takes to recruit and retain loyal customers who buy our products, because the more real, satisfied customers we have, the more successful our entrepreneurs will be.

The mantra for this new decade must be, “We are a customer-centric industry. We build strong retail bases, and the opportunity seekers follow.

 2019 Was A Tough Year

 The gospel of recruiting retail customers and segmenting them from distributors is beginning to resonate. Direct selling companies have created preferred customer programs, for example, to properly identify those who buy products on a regular basis but have no intention to sell them or build a downline. According to the DSA, there are 26.2 million preferred customers in our marketplace, up 48.9 percent from the year before. Companies also are creating new channels that invite customers to browse and buy with no talk of joining or obligation to join the compensation plan. Still, the headlines in 2019 suggest that we have more work to do to earn the trust of the marketplace and regulators.

Last year, Plano, Texas-based AdvoCare, and its former chief executive officer agreed to pay $150 million and be banned from multi-level marketing to resolve Federal Trade Commission (FTC) charges that the company operated an illegal pyramid scheme. AdvoCare subsequently announced that it would no longer pay distributors on the sales of the salespeople in their downlines but will pay only on sales to retail customers.

The headlines in 2019 suggest that we have more work to do to earn the trust of the marketplace and regulators.

On the heels of the AdvoCare settlement, Neora sued the FTC, releasing data that the company says contradicts and questions the legitimacy of the agency’s charge that Neora violates compensation structure rules, among other regulations. The FTC then filed suit against Neora.  LuLaRoe also faced legal action, in Washington state, in early 2019. In China, the industry’s biggest market, the government investigated direct selling companies country-wide and revoked selling rights for 49 products.

Most companies in our industry play by the fast-changing rules. But some of those companies may inadvertently fall back into familiar patterns. Some, as we found out last year, may have hoped no one would notice that they were playing by the old rules the whole time. Writes Hester, “If the leadership operates with an arrogance that everything is okay and apathy that causes us to follow our current path, I suspect the future will be unkind to this industry.”

 Retail and Recruiting Can Coexist

What does a customer-centric direct selling company do? It certainly doesn’t leave the recruitment of business builders to chance. As in any sophisticated sales-driven organization, salespeople are the ones who develop customer relationships, which fuel revenue growth. But when distributor recruitment becomes a direct selling company’s sole focus, they risk losing sight of the importance of real retail sales. And that’s where our industry gets in trouble.

Smart direct selling companies know how to be customer-centric and distributor-focused at the same time. They imagine their prospective customers and distributors entering the same highway from separate on-ramps and then traveling in their own clearly marked lanes.

In the retail lane, customers find products quickly and purchase them easily, online, or in-person from a distributor. They never get an offer that even implies that they’re agreeing to anything other than paying for the products. Raleigh, North Carolina-based Touchstone Essentials revised its online shopping portal so buyers can purchase without even seeing a check box that could enroll them as a distributor. By separating the back office from the shopping experience, the company created an environment where customers can have a traditional e-commerce-style shopping experience. Sandy, Utah-based LifeVantage, used to reward distributors more for recruiting other salespeople than for bringing in new customers. Now, they receive the same benefit for recruiting both.

It is okay to let retail customers see what’s happening in the distributor lane and make it easy for them to merge into that lane if they want to. But savvy direct selling companies let them do so at their own pace and according to their own timetable, realizing that most customers will never change lanes.

Traffic in your customer lane should be bumper to bumper, while your distributor lane should have fewer travelers in it. That’s the reality of the direct selling business model: Only one-sixth of the people involved in our industry came to us because they wanted to sell, and only about half of them are motivated to stay for the long-term income potential. Our pool of potential entrepreneurs is smaller than we’ve been willing to acknowledge, and the pool of potential high-earning business builders is even smaller.

Hope Marketing Isn’t A Strategy

 If you’re strategic and authentic about how you direct people into your distributor lane, you have a better chance of keeping a larger percentage of them. You’ve heard us say this before, but we can’t say it often enough: Your recruiting strategy has to be grounded in transparent messages about results.

Our industry markets “hope,” Hester writes—hope for everything from clearer skin to a more fit body to financial freedom. But we are drawn to sharing examples of distributors and customers who have achieved dramatic outcomes. Such examples may be valid, but they’re rarely typical. Our industry must stop traveling the Historical Path and resist marketing hope for something that most people won’t reach. “Hope is only valuable if it leads to results,” Hester writes. “We need to set realistic expectations if our goal is to keep them in the industry. Relationships are built by keeping people on a journey, not setting their sights on unrealistic expectations.

“A customer-centric approach increases all parts of the growth funnel.”
—Gordon Hester, Direct Selling Analyst

Direct selling compensation consultant Dan Jensen says that shooting for too many high-performing salespeople may actually hurt you in the long run anyway. “These very successful direct selling professionals can bring tremendous short-term success,” he writes. “But they can also be a major cause for failure when they grow bored with your company and join another, often taking many of their downline with them.

Hester and Jensen both believe that focusing on part-time entrepreneurs—what Hester calls the “lifeblood” of a direct selling organization—is a smarter strategy. “One must never forget that ordinary part-time people are the ones who must be motivated by [the compensation plan],” Jensen writes. “Plans designed for the part-timer always generate bigger checks for your full-time leaders.”

This link between part-time and full-time salespeople is part of what Hester describes in his book as “relationship stacking.” The bottom layer of the stack is a loyal retail customer base. Without people who regularly buy and use our products, our industry will not survive. The next layer is made up of what Hester calls “micro-entrepreneurs,” who recruit most of your distributors but also most of your customers. Remember, on the Next-Generation Path, you create a more customer-centric organization is, which makes it easier for those micro-entrepreneurs to make enough money to stay in business. If your micro group is strong and satisfied, then higher performers will emerge from that group, and even higher-performing distributors will come out of that group, and so on.

“In the end,” Hester writes, “the income earned by a distributor is directly correlated to critical mass and successful relationship stacking.

Look for Inherent Talent

 Whether we’re recruiting micro-entrepreneurs or top-selling distributors, our industry must be more realistic about who has the talent and the desire to be a business builder in the first place. This is where that idea of not upselling a business opportunity to people who aren’t shopping for one comes in. Yet, the majority of our distributors do come to us because they loved our products. So how do you distinguish product-only shoppers from shoppers who might be suited and in the market for something more? Try cross-selling instead of upselling.

Cross-selling involves digging a little deeper to determine a buyer’s underlying goal and then providing a path for meeting that goal. You may find that after digging, a customer’s goal is still just better health and well-being. But by asking the right questions and listening closely to the answers, you will discover some customers who have the true desire to join your sales ranks.

But desire doesn’t necessarily translate into talent. Sales is a hard job. According to research by the Bridge Group, one in three salespeople will voluntarily (or involuntarily) leave an organization every year. Look for distributors who aren’t deterred by the inevitable rejection that comes with sales, as well as those who want to grow personally and professionally in an organization that makes a difference in people’s lives. Those are the ones who will stay with you, whether they want to make an extra $500 a month or a full-time salary.

A Better Future

 Being a customer-centric industry means we will have to get used to more measured revenue increases. Our channel has been known for fast, exponential growth. But such growth is not sustainable in any company or industry. It’s critical that we change our mindsets and our expectations about what success means for us.

Says Hester, “If consumers do not continue to buy products and services through the direct selling channel, we will not have a better future. If entrepreneurs choose other business opportunity models, we will not have a better future. If our future is controlled by outside forces, it is only because of the behavior we practice within this industry.

The NINE Timeless Fundamentals

By Gordon Hester

The nine timeless fundamentals are foundational to all business, not just our industry are:

  1. Getting Customers (Customer Acquisition)
  2. Keeping Customers (Customer Retention)
  3. Getting New Entrepreneurs to Join the Industry (Recruiting)
  4. Enhancing Distributor Engagement (Relationship and Culture Building)
  5. Enhancing the Direct Selling Industry Brand (Personal and Business Branding; Perception Management)
  6. Enhancing How We Develop Distributors (Personal and Business Development)
  7. Expanding the Global Footprint of Direct Selling (Marketplace expansion)
  8. Mastering Cultural Addition (Making the industry a home for consumers and its entrepreneurs)
  9. Attracting Better Talent (Leader Recruitment)

Time for a Remodel

by Leave a Comment

How and why you need to put your customers ahead of your opportunity.

Do you want fries with that?” The classic upsell line. It works at McDonald’s because customers are already buying food, so the odds that they’ll want a little bit more food are good. But when direct selling customers hear “Would you like a business building opportunity with that?” it doesn’t have the same ring, because most of them are shopping for products, not a job selling those products.

The statistics bear this out: There are about six times as many retail customers (36.6 million)

in our industry as there are business builders (6.2 million), according to Direct Selling Association (DSA) Growth & Outlook research. Eighty-seven percent of direct sellers are part-time with many of those not interested in building downlines according to DSA research. And direct selling analyst Gordon Hester says, that among those who do consider becoming distributors, 80 percent of them ultimately are “unwilling or unable to build an organization.” But we can be a stubborn industry. “We too often try to turn customers into business builders,” Hester writes in his new book Positioned Right: The Forces Shaping the Future of Direct Selling and Network Marketing.

The mantra for this new decade must be, “We are a customer-centric industry.

In the book, Hester urges direct selling companies to move from the “Historical Path” to the “Next Generation Path.” The Historical Path is built on the “But we’ve always done it that way” mentality. Companies on this path cling to the status quo while competitors (in this and other industries) embrace new ways of thinking and operating. One of the hardest status quo habits for our industry to break (or at least loosen our grip on) is leading with the opportunity. Hester calls it “hope marketing,” in which we focus too much on the opportunity and the aspirational elements of being a distributor and not enough on what our products mean to customers.

Companies on the Next Generation Path, however, are all about what it takes to recruit and retain loyal customers who buy our products, because the more real, satisfied customers we have, the more successful our entrepreneurs will be.

The mantra for this new decade must be, “We are a customer-centric industry. We build strong retail bases, and the opportunity seekers follow.

 2019 Was A Tough Year

 The gospel of recruiting retail customers and segmenting them from distributors is beginning to resonate. Direct selling companies have created preferred customer programs, for example, to properly identify those who buy products on a regular basis but have no intention to sell them or build a downline. According to the DSA, there are 26.2 million preferred customers in our marketplace, up 48.9 percent from the year before. Companies also are creating new channels that invite customers to browse and buy with no talk of joining or obligation to join the compensation plan. Still, the headlines in 2019 suggest that we have more work to do to earn the trust of the marketplace and regulators.

Last year, Plano, Texas-based AdvoCare, and its former chief executive officer agreed to pay $150 million and be banned from multi-level marketing to resolve Federal Trade Commission (FTC) charges that the company operated an illegal pyramid scheme. AdvoCare subsequently announced that it would no longer pay distributors on the sales of the salespeople in their downlines but will pay only on sales to retail customers.

The headlines in 2019 suggest that we have more work to do to earn the trust of the marketplace and regulators.

On the heels of the AdvoCare settlement, Neora sued the FTC, releasing data that the company says contradicts and questions the legitimacy of the agency’s charge that Neora violates compensation structure rules, among other regulations. The FTC then filed suit against Neora.  LuLaRoe also faced legal action, in Washington state, in early 2019. In China, the industry’s biggest market, the government investigated direct selling companies country-wide and revoked selling rights for 49 products.

Most companies in our industry play by the fast-changing rules. But some of those companies may inadvertently fall back into familiar patterns. Some, as we found out last year, may have hoped no one would notice that they were playing by the old rules the whole time. Writes Hester, “If the leadership operates with an arrogance that everything is okay and apathy that causes us to follow our current path, I suspect the future will be unkind to this industry.”

 Retail and Recruiting Can Coexist

What does a customer-centric direct selling company do? It certainly doesn’t leave the recruitment of business builders to chance. As in any sophisticated sales-driven organization, salespeople are the ones who develop customer relationships, which fuel revenue growth. But when distributor recruitment becomes a direct selling company’s sole focus, they risk losing sight of the importance of real retail sales. And that’s where our industry gets in trouble.

Smart direct selling companies know how to be customer-centric and distributor-focused at the same time. They imagine their prospective customers and distributors entering the same highway from separate on-ramps and then traveling in their own clearly marked lanes.

In the retail lane, customers find products quickly and purchase them easily, online, or in-person from a distributor. They never get an offer that even implies that they’re agreeing to anything other than paying for the products. Raleigh, North Carolina-based Touchstone Essentials revised its online shopping portal so buyers can purchase without even seeing a check box that could enroll them as a distributor. By separating the back office from the shopping experience, the company created an environment where customers can have a traditional e-commerce-style shopping experience. Sandy, Utah-based LifeVantage, used to reward distributors more for recruiting other salespeople than for bringing in new customers. Now, they receive the same benefit for recruiting both.

It is okay to let retail customers see what’s happening in the distributor lane and make it easy for them to merge into that lane if they want to. But savvy direct selling companies let them do so at their own pace and according to their own timetable, realizing that most customers will never change lanes.

Traffic in your customer lane should be bumper to bumper, while your distributor lane should have fewer travelers in it. That’s the reality of the direct selling business model: Only one-sixth of the people involved in our industry came to us because they wanted to sell, and only about half of them are motivated to stay for the long-term income potential. Our pool of potential entrepreneurs is smaller than we’ve been willing to acknowledge, and the pool of potential high-earning business builders is even smaller.

Hope Marketing Isn’t A Strategy

 If you’re strategic and authentic about how you direct people into your distributor lane, you have a better chance of keeping a larger percentage of them. You’ve heard us say this before, but we can’t say it often enough: Your recruiting strategy has to be grounded in transparent messages about results.

Our industry markets “hope,” Hester writes—hope for everything from clearer skin to a more fit body to financial freedom. But we are drawn to sharing examples of distributors and customers who have achieved dramatic outcomes. Such examples may be valid, but they’re rarely typical. Our industry must stop traveling the Historical Path and resist marketing hope for something that most people won’t reach. “Hope is only valuable if it leads to results,” Hester writes. “We need to set realistic expectations if our goal is to keep them in the industry. Relationships are built by keeping people on a journey, not setting their sights on unrealistic expectations.

“A customer-centric approach increases all parts of the growth funnel.”
—Gordon Hester, Direct Selling Analyst

Direct selling compensation consultant Dan Jensen says that shooting for too many high-performing salespeople may actually hurt you in the long run anyway. “These very successful direct selling professionals can bring tremendous short-term success,” he writes. “But they can also be a major cause for failure when they grow bored with your company and join another, often taking many of their downline with them.

Hester and Jensen both believe that focusing on part-time entrepreneurs—what Hester calls the “lifeblood” of a direct selling organization—is a smarter strategy. “One must never forget that ordinary part-time people are the ones who must be motivated by [the compensation plan],” Jensen writes. “Plans designed for the part-timer always generate bigger checks for your full-time leaders.”

This link between part-time and full-time salespeople is part of what Hester describes in his book as “relationship stacking.” The bottom layer of the stack is a loyal retail customer base. Without people who regularly buy and use our products, our industry will not survive. The next layer is made up of what Hester calls “micro-entrepreneurs,” who recruit most of your distributors but also most of your customers. Remember, on the Next-Generation Path, you create a more customer-centric organization is, which makes it easier for those micro-entrepreneurs to make enough money to stay in business. If your micro group is strong and satisfied, then higher performers will emerge from that group, and even higher-performing distributors will come out of that group, and so on.

“In the end,” Hester writes, “the income earned by a distributor is directly correlated to critical mass and successful relationship stacking.

Look for Inherent Talent

 Whether we’re recruiting micro-entrepreneurs or top-selling distributors, our industry must be more realistic about who has the talent and the desire to be a business builder in the first place. This is where that idea of not upselling a business opportunity to people who aren’t shopping for one comes in. Yet, the majority of our distributors do come to us because they loved our products. So how do you distinguish product-only shoppers from shoppers who might be suited and in the market for something more? Try cross-selling instead of upselling.

Cross-selling involves digging a little deeper to determine a buyer’s underlying goal and then providing a path for meeting that goal. You may find that after digging, a customer’s goal is still just better health and well-being. But by asking the right questions and listening closely to the answers, you will discover some customers who have the true desire to join your sales ranks.

But desire doesn’t necessarily translate into talent. Sales is a hard job. According to research by the Bridge Group, one in three salespeople will voluntarily (or involuntarily) leave an organization every year. Look for distributors who aren’t deterred by the inevitable rejection that comes with sales, as well as those who want to grow personally and professionally in an organization that makes a difference in people’s lives. Those are the ones who will stay with you, whether they want to make an extra $500 a month or a full-time salary.

A Better Future

 Being a customer-centric industry means we will have to get used to more measured revenue increases. Our channel has been known for fast, exponential growth. But such growth is not sustainable in any company or industry. It’s critical that we change our mindsets and our expectations about what success means for us.

Says Hester, “If consumers do not continue to buy products and services through the direct selling channel, we will not have a better future. If entrepreneurs choose other business opportunity models, we will not have a better future. If our future is controlled by outside forces, it is only because of the behavior we practice within this industry.

The NINE Timeless Fundamentals

By Gordon Hester

The nine timeless fundamentals are foundational to all business, not just our industry are:

  1. Getting Customers (Customer Acquisition)
  2. Keeping Customers (Customer Retention)
  3. Getting New Entrepreneurs to Join the Industry (Recruiting)
  4. Enhancing Distributor Engagement (Relationship and Culture Building)
  5. Enhancing the Direct Selling Industry Brand (Personal and Business Branding; Perception Management)
  6. Enhancing How We Develop Distributors (Personal and Business Development)
  7. Expanding the Global Footprint of Direct Selling (Marketplace expansion)
  8. Mastering Cultural Addition (Making the industry a home for consumers and its entrepreneurs)
  9. Attracting Better Talent (Leader Recruitment)