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Authentic Imagery Matters

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Grabbing attention and influencing action with compelling images is still a top social media marketing strategy. A survey by Social Media Examiner shows that 80 percent of marketers use visual assets in their social media marketing. Nearly a third of marketers say visual images are the most important form of content for their business.

“We are incredible at remembering pictures,” says a study by Brain Rules. “Hear a piece of information, and three days later you will remember 10 percent of it. Add a picture, and you will remember 65 percent.”

What Can’t Be Overlooked: Creating effective social media images starts with understanding the social platform, and why the audience is on that platform in the first place. Is it an in-the-moment experience such as Facebook, or is it a more searchable experience, such as Pinterest? People typically use LinkedIn to make business connections, while they may use Twitter to keep up to date with news.

Instagram leans more artistic, while Facebook is about bitesize pieces of info. Pinterest focuses on crafts, food recipes, fashion and home décor. Understanding how your audience behaves on each platform can determine how you create images and your overall goal for posting them.

“Using boring stock images as your visuals will not help your marketing efforts— you want to create something that is wholly unique.” – Jeff Bullas, online business coach

Keep’N It Real: Social media users can smell a stock image from miles away. People go to social platforms to make genuine connections with friends, family, and brands they love and trust. Being authentic is key, and your images should illustrate that. “Using boring stock images as your visuals will not help your marketing efforts,” says online business coach Jeff Bullas. “You want to create something that is wholly unique.”

Showing real people in real situations creates trust and connection. Overly staged photos or boring product shots without context do not connect on an authentic level. Instead, share images that illustrate genuine stories, offer valuable information, or create context in a compelling setting.

What’s Working On Facebook: According to research by BuzzSumo, images earn 2.3 times more engagement on Facebook than text posts. Since users scroll through their Facebook feed, images should be eye-catching, quickly communicating the message. They should be easy to consume and emotionally impactful.

The most heavily liked images on Facebook, according to an International Conference on Information Management report, have these four qualities: brightness, clarity, liveliness and ingenuity. When it comes to showing pictures of people, research by Convince & Convert shows that images receive more engagement when they show only a body part, such as interlocking arms or a hand holding something. These images performed 29 percent better than images showing a full person.

What’s Working On Instagram: Unlike Facebook, Instagram users tend to prefer pictures of faces. The Georgia Institute of Technology and Yahoo Labs looked at 1.1 million Instagram photos and found that those with faces were 38 percent more likely to receive likes than photos without. These were 32 percent more likely to attract comments. A Curalate study found these characteristics of impactful photos:

    • Feature a single dominant color
    • Have a lot of texture
    • Tend to be bright
    • Feature a lot of white space
    • Tent to the blue end of the spectrum
    • Less saturation

Visually Connecting With Your Audience: Use social media images as a chance to communicate your brand’s values with your audience. That can apply to the purpose and benefits of your products for potential customers, or the value of the business opportunity for potential distributors.

As examples, Nike creates visual content about sports and staying active. Red Bull does not show a boring can but creates images and videos showing people performing amazing feats that require a lot of energy. Amway’s XS energy drink often depicts people drinking XS on the beach, biking or hiking.

Hubspot says informative images are three times more likely to get shared than text alone. Infographics are another unique way to visually illustrate information. “That is why 41.5 percent of marketers said that graphics like infographics are the most valuable,” Bullas says on his website. “Infographics even outranked the internet’s favorite file format, GIFs.”

Creating A CTA With Images: Just because image content generates a high amount of impressions, comments or shares doesn’t necessarily mean it influences your audience to act. Eventually, you want people to take action. A call-toaction can be created with a simple graphic, perhaps used after a series of other compelling images of people using a product.

Text-based graphics can still effectively communicate brand with fonts, colors and background illustrations. Black Friday deals, flash sales, product launches and live video announcements are just a few examples that encourage people to shop, grab, enroll or watch. Make sure to use the specific CTA word related to the content.

“Do you want your content to stand out in the midst of all the noise online? Visual content is the answer. Neglecting images in your content or using basic stock photos aren’t viable options. You won’t be able to compete with the competition even if your writing is top-notch,” says Bullas.

Q&A with Brett Blake

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Bringing more investment into Direct Selling

According to direct selling veteran Brett Blake, direct selling companies need more capital, but even more, they need the help of smart investors and savvy executives from outside the industry to close the gap between current practices and those that will help it scale into the mainstream of public acceptance.

Blake’s new book Private Equity Investing in Direct Selling: Identifying Risks and Rewards was written to help investors make smart investments and to be more valuable partners to their portfolio companies. He leveraged his relationships to perform front-line research for this book. He interviewed dozens of direct selling CEOs and investors and captured their experiences and best thinking in this book. He also documented more than 125 deals, summarized due diligence questions every investor should ask, and created a comprehensive list of the KPIs that the most successful direct sellers use to measure the health of their business.

Although the book is aimed at the investment community, it’s a must-read for every direct selling executive. I see it being a go-to resource within our own industry, the media, as well as anyone looking to understand the channel’s unique nuances.

How did the idea for the book come to be?

Everyone who reads the title of the book tells me—that is not a best seller. I agree, it wasn’t written as a best seller. I have had this unique vantage point to be able to watch many financial deals get done in our industry. Some of the deals have been great, and several have been really disastrous both from the field’s perspective and in many cases for the founder’s perspective, and often for the private equity firms. As a former CEO of a few direct selling companies, I’ve realized that capital is so hard to get in our industry, partly because of some of these bad deals. Based upon the experiences I’ve personally been a part of, I felt like I was in a unique position to write a book that would help investors make better decisions. Hopefully, better decisions mean there is a better return on capital deployed in direct selling and over time more capital available for direct selling companies.

What are some of the most common misconceptions that the investment community has about direct selling?

A lot of the misconceptions aren’t much different from what our customers and new distributors have about our industry. Once they get past these stereotypes and prejudices, many investors are surprised with the dynamics of our independent sales force. Many people come into this industry assuming our independent sales force are just like employees, and you could tell them exactly what to do. They fail to understand the complexity of being able to really think through how does one motivate a sales force, and what is required to get them engaged both mentally and emotionally in the business. As you know our industry is different from many others, in that you can’t always tie a direct return on investment to more capital invested like you can with a brick and mortar retail establishment.

Let’s say I’m a Starbucks, and I have a good idea of how much it costs to build out the store. I know what my lease payment and fixed overhead will be. To some degree, I know every store that I build, I’m going to get “x” return from that store. It’s not like that in direct selling. You can’t just say I’m going to deploy another $20 million or $100 million, and I’m going to get $120 million return on that invested capital. It’s a different experience investing in direct selling companies, but it’s one that can be really rewarding for investor portfolios.

In your book, you say that direct selling has a favorable economic engine. Explain a little bit what this means.

I went into this project with a concern that there were not really great exit strategies for investors in our space. I was surprised by one of the first interviews I had with a very large private equity partner who said to me—What we love about direct selling is that there are more places for us to get a return than is typical, because of how favorable the economics of the business, and particularly what a cash-rich business most direct selling businesses can be. That was a big eye opener to me. If you set the economics aside, I think right now we’re at this place where we talk a lot about the gig economy, or as I like to refer to it as independent contractor enterprises.

“Hopefully, better decisions mean there is a better return on capital deployed in direct selling…”

I think businesses are starting to realize that more and more of what they do can, and ought to be, outsourced to partners. Some of our best direct selling companies are doing this. You don’t need a lot of people to make an enterprise unique. You can outsource your call center and customer service, product development, manufacturing and distribution and even marketing and IT services. And what remains are the unique ideas, culture and systems that really make the company competitive.

This is why investing in direct selling companies is a compelling choice for private equity executives. We have a lot of experience in knowing how to motivate an independent sales force by creating incentive systems that work.

Investors can learn a lot about the human element of an enterprise that requires independent contractors. It requires you to find a way to tap into and motivate individuals who are essentially volunteers who work the business on their own terms.

You talk about the common characteristics that make up a direct selling company, that you call the 5 S’s. Which one do you think is the most important?

I think the most important—and the least understood right now—is a simple selling system that is so straightforward that the newest person can look at what other people are doing and say, Yeah, I can do that.

Far too few of the companies that I’ve worked with at the corporate level understand how important it is to have a simple selling system. I talked to a lot of executives about their systems, and they say, We’re a party plan company, and we sell through parties. That’s our system. The transactions may happen at a party, but selling system contemplates the conversations that take place before a party and how guests are invited to the party. If you don’t know how a salesperson starts a conversation about your company’s products and how that conversation leads to a transaction, chances are you don’t know or don’t have a selling system.

CONNECT WITH BRETT For more information about Brett and to order his new book, visit InvestIngInDirectSelling.com.

Companies may not understand that there are a lot of simple and well thought out systems that are required for success:

  • How do I begin a conversation and acquire a customer?
  • How do I upgrade that customer eventually to a distributor?
  • What’s my system for onboarding new distributors?
  • What’s my system for taking a new distributor and helping them earn that first level that will allow them to be profitable in their business?
  • As somebody begins to build a team, what’s the system for helping them become a leader and provide leadership to their team?

What I’ve seen that happens too often is these systems get implemented or created at the field level, and the corporate team rarely understands or knows that they even exist. Therefore, bad decisions are made at the corporate level that can mess these simple systems up.

You talked with a lot of direct selling CEOs in the course of writing your book. What were some of the insights that you learned that maybe you didn’t expect?

Three insights stand out from my interviews with CEOs: First, there are more deals being done than I realized. I went into this project thinking that there were very few deals that got done in direct selling. Then when I started documenting, I was shocked at just how many deals have been done in our industry and continue to be done. That was a big surprise.

Second, I learned helpful ways of looking at common problems. For example, I was able to understand more about the fall off of some of the companies that I studied. If you look at trends, so many companies have a three to five-year run, and then they see a decline in sales. Both Darren Jensen, CEO and President of LifeVantage and Orville Thompson, Co-CEO of Scentsy shared with me the philosophy that your sales tend to outpace your ability to develop leaders, and then there’s a leadership gap. To hear how companies are trying to fill that leadership gap has been really interesting.

Finally, I was reminded how open CEOs are to helping others in the channel. Over the years, I’ve been so grateful for the relationships I’ve had. The fact that 30 executives would open up their calendars to find time to help me with a project like this was really telling and helpful.

At the end of the book, I had a chance to go back and ask many of the individuals that I have interviewed, why are they in this space and what motivates them. It was inspiring to hear many of the CEOs share why they still love being a part of direct selling and how much satisfaction they get from the work they do day in and day out.

The Five S’S: Common Characteristics of Great Direct Selling Companies By Brett Blake

In my twenty-plus years of experience, I have learned that great companies consistently deliver on what I call the “Five S’s of Direct Selling:”

  1. Social Benefits—they have more than just an economic reason for being.
  2. Stakeholder Value—they deliver value not only to shareholders, but to all stakeholders including customers, distributors, employees and owners.
  3. Sellers Who Add Value—they have thought through the role of their sellers and positioned them as guides who add value to the customer’s experience.
  4. Simple Sales System—they have a straightforward system that causes the newest seller to say, “I can do that!”
  5. Stickiness—they have built attractive hooks into their business so that customers and sellers want to stick around.

The Five-Dollar Jewelry Empire

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Can five-dollar accessories change the world? Maybe not, but thousands of bargain jewelry-wielding Paparazzi consultants are willing to try.

Many of today’s hottest brands had humble beginnings. So too was the genesis of Paparazzi Accessories, an unassuming company turned jewelry powerhouse who began as little more than a pastime for sisters Misty Kirby and Chani Reeve. While their kids played around them, Misty and Chani would make headbands in their living room. When their schedules and budgets allowed, they would pack up their creations and sell them at vendor fairs and arts and crafts shows.

Their creations gained attention, so Misty and her husband Trent, as well as Chani’s husband Ryan, traveled to China in search of the right manufacturing partner to expand and streamline their distribution process. Locking arms with a manufacturer who could tick all the boxes they deemed non-negotiable (lead- and nickel-free materials, ethical working conditions and rock-bottom pricing) took three trips. However, that successful connection was the turning point that helped the two families transform their small business into a booming organization.

But even as the company flourished, the founding families endured plenty of growing pains in those early days.

“I remember after we officially launched and became Paparazzi as we all know it today, we had six orders that came in, and we thought we would die. It was just the four of us trying to fill these six orders, and we had kids running around everywhere. We didn’t have a receptionist. We didn’t even have employees at the time, so all the phone calls were coming to our cell phones with kids screaming. It took us all day long to fill those six orders. As I look back, I think it’s fun to see that we started with those six orders and no employees, and now we have a lot of employees and thousands and thousands of consultants all over the United States,” shares Chani Reeve.

Five-Dollar Fix

Paparazzi began building a reputation as a brand that emphasized classic jewelry for women of every generation at an accessible price of $5 per piece, and within six months, the company grew 900 percent. In January 2011, the Kirbys and Reeves decided to extend that sense of accessibility to their infrastructure as well through the direct selling business model.

“I never have someone who just buys one item from me. Most ladies hear ‘five dollars’ and they want at least four.” —Earica Cole, Consultant

Their low $5 price, mixed with their high commission rate of 45 percent, attracts consultants from diverse financial backgrounds. Earica Cole, a consultant whose team sells more than 750,000 pieces of jewelry each month, was a director of mortgages for an organization in Atlanta when she joined the company in 2017 after seeing her friend mention the opportunity on social media. It was a leap Earica almost didn’t make because she wasn’t known to wear or buy jewelry at such a low price point. “I joined Paparazzi thinking I’d make a couple of hundred bucks and use it as a tax advantage,” Cole says. Seven months later, she relocated her family to Alabama after being promoted to vice president, only to quit her day job five months after that when the income from her Paparazzi side gig drastically dwarfed her traditional income.

For the company’s top individual consultant Geraldine Souza, Paparazzi entered her life in the wake of a costly divorce that left her renting out the bedrooms in her home to make ends meet. For her, selling five-dollar jewelry as a side gig became her own personal challenge. “I wanted to prove to people that if you put in the hard work and the energy, you don’t need a large team with large commissions to make your dreams come true,” Souza says. Within three months, she incorporated her business and today pays a full-time staff more than $100,000 a year to handle her shipping and billing, while she maintains her previous full-time job. Souza’s personal sales, not including her team’s efforts, reached more than 331,000 PV this year, or the equivalent of more than three-quarters of a million dollars in sales. This recordbreaking number led the founders to announce two new ranks created specifically for Souza, who had out earned and outsold all the company’s existing levels. “It’s really important for people to know that I built this one piece of jewelry at a time—not off of my team commissions, but solely off of my sales.” While her day job’s salary can’t compare to what she earns through Paparazzi, she enjoys the opportunities it provides her, and Paparazzi has erased her debts. “I don’t have to think about my retirement,” Souza says. “It’s beyond something I can’t even fathom.”

The House That Bling Built

The five-dollar price tag may be the company’s “it” factor, but with no brick and mortar retailers or sales outsourcing, consultants are the fuel revving the company engine. It’s this person-to person interaction that provides the advantage a product like Paparazzi’s needs. With clearance rack pricing, customers might be quick to dismiss the products as cheap or irrelevant, but seeing the jewelry firsthand from a friend or online connection helps customers witness the quality and trend-chasing that Paparazzi prioritizes. Cole, who admits that the bargain bin price almost turned her off initially, now sees the power it wields. “I never have someone who just buys one item from me,” Cole says. “Most ladies hear ‘five dollars’ and they want at least four. People usually spend $20-$100.”

“We call it crazy, unpredictable, exponential growth.” —Misty Kirby, Founder

Feeding that Paparazzi “five-dollar habit,” as it’s known among consultants, has caused a need for rapid corporate expansion. “We call it crazy, unpredictable, exponential growth,” Misty said at the ribbon-cutting for the company’s new headquarters in St. George, Utah in April. Speaking to a crowd of consultants eagerly waiting to tour the new offices, she explained that in the time it took to construct the new headquarters—a building doused with cascading chandeliers that look like earrings and showrooms filled with the latest jewelry collections—the company had already outgrown its footprint. What was intended to simply be a ribbon cutting, instead doubled as a groundbreaking for a new 260,000 square foot warehouse as well.

As with any direct selling company who experiences rapid growth and expansion over a short period of time, they still have some work to do when it comes to communication with unhappy customers and distributors. They currently have an F rating with the Hurricane, Utah Better Business Bureau for failing to respond to 34 complaints against the company.

One Life To Lead

Celebrating these milestones of growth has manifested in the Paparazzi Passport Vacation, a lavish getaway that has also become a way to give back through service opportunities, like the playground and school refurbishment the founders and consultants did while in Bayahibe, Dominican Republic this year. It’s an effort that reinforces the company’s mission statement: “While five-dollar jewelry may not change the world, we believe those who wear it will.”

At Paparazzi’s annual convention in August, consultants crowded into the MGM Grand Resort and Casino in Las Vegas to learn how to better live out that mission statement. One Life 2019, named after the idea that each consultant has only one life with which to make a mark on the world, was filled with training, shopping, networking, and a Jonas Brothers finale. As the week came to a close, Misty gathered Paparazzi’s top consultants on stage beside her—a dozen women who represented millions of items of jewelry sold—and described the potential within the Paparazzi opportunity that the women on stage symbolized: “They are walking examples of those who build a retail empire out of five-dollar jewelry.”

One for the Books

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A season of striving and success at Usborne Books & More.

USBORNE BOOKS & MORE
Founded: 1989
Headquarters: Tulsa, Oklahoma
Top Executives: Randall White, President and CEO
2018 Net Sales: $118,811,300                                                        Products: Educational children’s books

These words are both timely and true for Usborne Books & More, as the last three years have been marked by more change and growth than perhaps some thought the company could withstand. However, today, as the dust of expansion and change have settled, CEO Randall White and his team look confidently forward, believing the best is yet to come.

As the tide of the digital age began to rise, every industry with ties to the printed page held its breath, especially those in publishing. “Ten years ago, people told me that we’d be out of business because everything will be digital and no one will be buying books,” recounts Randall White, CEO of Educational Development Corporation (EDC) and Founder of Usborne Books & More (UBAM). Today, that doomsday prediction isn’t even on the radar for UBAM, a Tulsa-based seller of educational children’s books. “As far as children’s books, nothing has changed,” he says. “Nothing has changed about holding books, chewing on them or dropping them.” While advancing technology didn’t usher in the end of books as we know them, it did change how people buy them. This digital evolution forced UBAM into a season of uncomfortable transformation that has forever changed the way the company operates.

Logistical Evolution

Usborne Books & More was launched as a direct selling division of Educational Development Corporation in 1989 with a mission to get high quality, affordable children’s books in more homes across the country. Until the mid-2000s, UBAM independent consultants mainly sold books through traditional direct sales home parties and book fairs. But all that changed with the advent of the online marketplace. More and more, customers began purchasing UBAM books online and then through Facebook parties, generating record growth for the company from 2015 to 2018.

“Today the business is no longer a side conversation. We offer a growing, bustling business opportunity that happens to sell incredible books. ” —Heather Cobb, Chief Sales and Marketing Officer

Usborne Books & More

“In 2015 when we went from $32 million to $65 million, it was okay,” shares White. “But growing from $65 to $107 million the following year, that was a real struggle, one of our most difficult times handling the growth.”

As sales and consultant numbers grew, UBAM moved into a new facility in early 2016 to accommodate more inventory, but as much as the company needed more space, it also required more efficient operations. By the fall of 2016, UBAM’s overextended distribution process had reached a breaking point.

“In late November of 2016, we had 127,000 orders prepaid to ship—many were Christmas presents—and we could only ship 8,000 per day,” he says. “It was taking us about 4-5 weeks to ship an order. We lost a lot of consultants and customers (during that time).”

As the largest UPS shipper in the entire state of Oklahoma, UBAM looked to the shipping giant to advise on best practices, knowing they needed a complete overhaul of their distribution system. “We ship heavy products,” explains White. “It’s quite a challenge to ship that quantity. UPS served as a consultant for us and told us what we needed. We put in a state-of-the art picking system. We ran night shifts and got it done. We got more efficient, and now UBAM shipping is world-class— we ship the same day we get the order!”

In December 2018, EDC Chief Operating Officer Craig White was featured on the cover of Modern Material Handling with the headline Educational Development Corporation writes a new chapter in distribution. The challenges of the previous three years had been successfully navigated, and a new season was on the horizon.

Turning A Page

Chief Sales and Marketing Officer Heather Cobb sums up this transformative season this way: “The last years have been spent growing, catching up to that growth and preparing for more.”

The tremendous leap in sales wasn’t the only jump UBAM experienced in that season. UBAM saw their consultant roster increase from 8,000 in 2015 to over 31,000 at the end of 2018, just in time to celebrate the company’s 30th anniversary.

“We’re seeing a new generation of UBAM families who were raised on our books and are now having kids of their own.” —Heather Cobb, Chief Sales and Marketing Officer

“We celebrated our 30th anniversary at our 2019 National Convention with a play on words – ‘30 Years in the Books,’” shares Cobb. “We put all the focus on our products, that’s our one absolute constant over the years. All of our speakers used one of our books in their presentation, including our keynote speaker Christy Wright.”

While the UBAM business opportunity hasn’t changed significantly over the past three decades, this last season of growth led to a subtle cultural shift that is empowering both new and veteran consultants.

“Culture-wise one of the biggest changes we’ve experienced is that we’ve gone from a company that sells amazing, quality books and offers a side business to making the business the forefront,” explains Cobb. “Today the business is no longer a side conversation. We offer a growing, bustling business opportunity that happens to sell incredible books. We’re more open and transparent about the business opportunity and more confidently sharing that opportunity.”

New consultants can choose from different kit options when they join UBAM – a standard kit that includes twenty titles for $125 or a “mini” kit for $75 that includes ten titles. To celebrate 30 years in business, UBAM also offered a summer promotional kit for $30 with five titles. “The 30th anniversary recruiting special was huge – we had 10,000 signups,” says Cobb.

The Next Chapter

With thirty years “in the books,” many UBAM consultants have been in business for decades, sharing books with children who are now becoming customers and consultants themselves. “We’re seeing a new generation of UBAM families who were raised on our books and are now having kids of their own,” shares Cobb. “They want the opportunity to share the books they read and the characters that they knew with their own children.”

“We put in a state-of-the-art picking system. We ran night shifts and got it done. We got more efficient, and now UBAM shipping is world-class.” —Randall White, President, CEO and Founder

Usborne’s treasured titles from years past are joined by a constantly expanding collection of new titles, including hundreds of Kane Miller books that joined the UBAM family in 2008 such as the Usborne Books & Morerecent addition of survival handbooks by Bear Grylls. “We continue to seek out the highest quality books,” says Cobb. “We want to make sure we sit on that top shelf space, especially in the minds of our customers.”

To share these exciting titles, UBAM has made technology and social media a large part of its marketing strategy. The marketing and creative team create social media graphics and backgrounds so consultants can create their own personalized materials. Beyond engaging customers with eye-catching creative, UBAM is leveraging technology to make business activities easier for their consultants as well. “We’re looking to become totally mobile friendly for consultants and the younger generation joining us,” says White. “Our big push is to make our business compatible with any tech someone wants to use.”

While technology has changed the way many people buy them, the value that children’s books have in society remains the same. “At the end of the day there continues to be a literacy crisis,” shares Cobb. “The need for quality kids’ books in homes and libraries is our biggest reason for growth and what drives us each and every day. It’s important to us that we keep them affordable, available and offer an opportunity that’s for everybody.”

Finders, Keepers

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How Strategic Onboarding And Support Lead To Better Retention

We use to go to work at a company in our 20s and retire from that company in our 60s. Staying put was just what we did.

Things have changed. Call it restlessness, distractibility, ambition, or all of the above—the urge to move is constant among today’s workforce.

The average worker stays at his or her job for two to five years, according to the U.S. Bureau of Labor Statistics. The BLS says that annual employee turnover in 2018 was 26.9 percent, a rate that the Society for Human Resource Management (SHRM) reports will reach 30 percent in 2020. Churn among entrepreneurs is even higher: BLS data show that business failure rates increase every year after startup. For example, one in five U.S. companies that opened in 2017 closed in 2018, and half of the startups that launched in 2013 were gone five years later.

In the context of these stats, it’s not surprising that as a hybrid employment-entrepreneurial opportunity, direct selling has more turnover than most channels. According to DSA’s 2019 Growth & Outlook Report, the sales force turnover rate in direct selling in the U.S. in 2018 is 43.3 percent. Yes, direct selling can have high turnover, and this is certainly an area for improvement. But it’s important to recognize the inflation due to the seasonal and goal-oriented motivations of many direct sellers. For example, many join to make supplemental income around the holidays or to help save up for a trip. In fact, retail overall has even comparable or higher turnover rates, with 58.3 percent turnover in 2018 according to the BLS.

“There’s an internal fortitude in true entrepreneurs that determines whether or not they are going to succeed.” —Joni Rogers-Kante, Founder and CEO, SeneGence

Direct selling is feeling pressure from regulators, gig competitors and rapidly changing technology. However, many industry leaders believe that our biggest challenge is having to constantly replenish our troops. Unlike traditional retail and service workforces, our sales teams are essentially volunteers who set their own hours and effort levels. We don’t really employ them, so we have to work extra hard to keep them. This requires a comprehensive onboarding and retention strategy of training, coaching, rewards and recognition to increase engagement, performance and loyalty.

Why People Leave

Before you start designing new welcome kits and incentive plans, though, take a moment to understand why people leave in the first place.

According to SHRM, most people change jobs because they’re looking for a better career opportunity. The second most common reason is to create more work-life balance. One or both of these needs could be triggered if a distributor feels like there’s only one way to approach your company’s opportunity.

onboarding

According to direct selling consultants at Direct Tech Labs, direct selling companies often fail at retention because they try to fit every distributor into the same box: the full-time, allin leader box. But most people don’t want to commit that kind of time and energy. Only one in five direct selling distributors works 30 or more hours per week, according to the latest DSA research. And of those who are interested in building a full-time business, fewer than one percent will become elite performers, says Direct Tech Labs. These numbers strongly indicate that the majority of people who come to you aren’t interested in being entrepreneurs. They’re picking up side work mostly to cover an income gap while adding some flexibility to their schedules.

Joni Rogers-Kante, founder and CEO of Foothill Ranch, California-based SeneGence, says she’s pleased with the retention rate among her company’s distributors, who number just under 200,000 worldwide. She attributes their longevity, in part, to the fact that many of them are professional makeover consultants and use SeneGence cosmetics as tools of their trade in addition to selling them.

But Rogers-Kante is also realistic about the level of entrepreneurial drive most salespeople have. During a recent period of hypergrowth at SeneGence, momentum was making it very easy for new distributors to build their downlines. “But when that hypergrowth leveled out, many of those newer distributors were not the ‘grit’ kind of distributors who dig in no matter what,” she says.

Stemming The Tide

The pool of people with the potential to be top-earning, longterm distributors is shallow—so it’s important to have practical expectations. But it’s also important to have onboarding and retention strategies and messages that give everyone the opportunity to be successful. You’ll be more likely to retain top performers while providing others the tools and support they need to reach whatever incremental goals they have. Here are some building blocks of great onboarding and retention programs.

1. Make Orientation Matter.
Whether you’re bringing an employee into the corporate office or adding a direct seller to your field team, an effective orientation program increases engagement and retention. Bestselling author and consultant Ron Carucci wrote recently in Harvard Business Review, “Organizations with a standardized onboarding process experience 62 percent greater new hire productivity, along with 50 percent greater new hire retention.”

Your orientation program should cover concrete things like how to use company resources and tools and as well as bigger picture concepts like company culture and regulatory compliance guidelines for talking about products and results.

2. Make Quick Sales Possible.

Uber drivers, Etsy handcrafters and Door Dashers are getting paid, literally, by the hour. The gig economy has transformed expectations for how fast cash flows and direct selling companies need to open up their taps.

According to GigEconomyGroup, distributors who convert a sale within 14 days of joining a direct selling company are likely to stay with that company for an average of six years—that’s two to four years longer than the average, according to BLS data. Direct selling training firm ServiceQuest says there’s a direct correlation between high retention rates like this and overall revenue growth, estimating that a 10 percent increase in retention grows revenue by 49 percent over 10 years.

What’s the key to scoring a win in two weeks? Industry experts say people need tools that make selling simple as well as immediate compensation and other rewards. More and more direct selling companies are embracing this imperative.

New Brand Partners at Neora (formerly Nerium International) can start selling right away from their starter kit or can quickly organize their first party, where all new customers generate a commission. A “Fast Start” program pays bonuses to new Brand Partners who sign up three team members or six customers in their first 30 days.

Perfectly Posh pays in less than five minutes from the time of sale, at no additional cost. “Someone could host a party in the morning, get paid and go shopping or out with their friends that same afternoon,” says Perfectly Posh Founder and CEO Ann Dalton.

“We’ve made significant improvements to our compensation strategy in order to compete in the gig economy,” says Nathan Larsen, Vice President of Field Development at Sandy, Utah-based 4Life. The company offers a Rapid Rewards program, which pays distributors a 25 percent commission on certain sales to new preferred customers within 24 hours, and a Builder Bonus program, which rewards distributors for activity that drives new recruits into the compensation plan’s first significant rank, Larsen explains.

“Most distributors come to you with zero sales experience and have no idea what it’s like to depend on a “yes” for their income.

3. BE TRANSPARENT.
While you’re managing your own expectations, keep them real for new distributors, too. Their excitement about selling a product they love will get them in the door, but you’ll be doing them a favor in the long run if you’re honest about what it takes to achieve and sustain certain levels of performance and income.

Be authentic about what the average distributor earns. Our industry has, fortunately, gotten increasingly away from selling the rags-to-riches story. Those stories are too rare. Most distributors won’t make multimillion-dollar incomes with your opportunity. The compensation plan at Lehi, Utahbased Xyngular, for example, clearly states that nearly 80 percent of its distributors earn $67 a month.

And don’t forget that not all new recruits want to build a downline. Some just want to purchase products they love for themselves at a discount and make some money selling those products to other retail customers. “Our compensation plan is devised so that a woman who just wants to build a customer base can make a handsome living just doing that,” Rogers-Kante says. “She doesn’t have to build a distributor base if she doesn’t want to.”

Be upfront about the rejection they’re going to face, too. Most distributors come to you with zero sales experience and have no idea what it’s like to depend on a “yes” for their income. Let them know that rejection is inevitable but coach them to see it as a learning opportunity, not a personal judgment. Mentoring from successful business builders and personal development that builds objectivity can help new distributors use rejection as fuel for improvement.

4. SUPPORT SUCCESS AT EVERY STEP.

onboarding

Having the right mindset and realistic goals are foundational for new distributors, but they also need a tangible business starter kit that includes enough to get them to that first sale quickly while not being overwhelming. Effective starter kits include such items as

  • product samples;
  • testimonials for products and the business opportunity;
  • steps to take in the first 24 to 48 hours, like “Give product samples to three potential customers”; and “Share business opportunity information with one potential distributor”;
  • steps for connecting with a company mentor; and
  • access to tutorials on using technology (social media platforms, the company’s sales app, etc.) to make contacts and sales.

Help new distributors get grounded and build confidence, and then offer more sophisticated training materials and challenges. Many will be satisfied with moderate accomplishment. A few will be driven to keep rising in your ranks. These performers will become your core, says Rogers-Kante. They’re the ones who thrive on overcoming obstacles and setting new standards. Give them recognition, rewards and elite training opportunities—like the monthly sessions Rogers-Kante holds in her homes—but remember that you are merely facilitating their success. “I don’t believe you can motivate anyone to do anything,” she says. “There’s an internal fortitude in true entrepreneurs that determines whether or not they are going to succeed.”

“Our sales teams are essentially volunteers who set their own hours and effort levels. We don’t really employ them, so we have to work extra hard to keep them.”

Even the most self-motivated individuals need a lift sometimes, though, executives say. This means that personal development is as or more critical than skill development. “If we focus only on the business side, we’d be missing a big part of the sales forces’ lives,” says Team National CEO Angela Loehr Chrysler.

“At our training, we talk a lot about our families, social responsibility and personal development,” adds Rogers-Kante. “We focus on topics that create the whole person so that a woman can live a balanced life without devoting her entire life to work.” This multidimensional approach is paying off for SeneGence, which recently surveyed its sales force to ask why they stay with the company and nearly 30 percent responded that it’s because of the culture.

“EASY” DOES IT

Direct Selling News has examined and analyzed hundreds of onboarding and retention programs in our industry, and what we’ve discovered is easy to describe and difficult to execute: Companies retain direct sellers when they meet those sellers’ needs. Trouble is, those needs vary widely, even within a single company’s sales force. Listen to your distributors and customers; watch their behavior, and tailor your program so that it meets and engages people where they are.

If there is a universal truth, though, it’s this: People want to work for a company where they can experience success and feel supported—whether they’re knocking the ball out of the park or struggling to find their footing. You’re more likely to keep people if you make it easy for them to stay.

Durable Rather Than Disposable

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Reusable packaging may be the future of sustainability and smart branding.

Today consumer’s behavior expects lightningfast shipping service. Free or nextday shipping is becoming a basic requirement.

However, the cost of speed is increasing packaging waste at an alarming rate. Packaging makes up one-third or more of our trash, according to TheWorldCounts.com. How often have you ordered something online that came in a box too big for the item you ordered? All those one-item Amazon Prime orders add up to lots of packaging. A growing trend to counter the problem that could have interesting applications for the direct selling industry is in eco-friendly, durable and reusable packaging.

Yes, reusable.

The concept is referred to as a Loop system—a platform announced at the World Economic Forum.

TerraCycle, a New Jersey-based company, created the system involving durable packages that are used and returned to be cleaned and then refilled for repeat use.

“It has the same convenience of disposability,” says TerraCycle co-founder Tom Szaky in an Inc.com article. “This is how we move packaging and products from being disposable and owned by the consumer to being durable and borrowed by the consumer. Packaging becomes a service.”

“With consumer acceptance growing, we now have the opportunity to view packaging as durable rather than disposable and offer solutions that are truly sustainable while delivering usage experiences never before possible,” the Inc. com article claims.

This process also provides brand awareness opportunities and additional value for customers. Reusable packages can feature technologies such as a supplement bottle that reminds customers when to take the product or when to reorder. How about a self-sealing package that ensures freshness? Not tossing the packaging in the trash makes it a much bigger part of the overall customer experience. Many direct selling companies already use starter kit boxes for new distributors that double as a product holder, educational piece or display item for the business.

Quaker Oats is testing a stylish metal canister that customers may want to display on their counter instead of hiding it in a pantry. Brooklyn’s The Wally Shop delivers local groceries in reusable containers and bags. Häagen-Dazs created a double-walled stainless-steel ice cream tub that keeps ice cream cold longer than a normal cardboard container.

Reusable, durable and “smart” packaging is coming, and its future is all about sustainability, functionality, branding and user experience.

Herbalife to Open First Product Innovation Center in Shanghai

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Herbalife Nutrition recently announced plans to open a Product Innovation Center in Shanghai by the third quarter of 2020.

“Opening the Center allows us to strengthen our local research and development capabilities to deliver more science-backed, quality products, and we expect to double both the number of products and speed to market in the next five years,” said Dr. Qunyi Zheng, senior vice president of Herbalife Nutrition, Chairman of Herbalife Nutrition China.

With an investment of over 100 million RMB in the next three years, the Innovation Center will be in Zhangjiang Hi-Tech Park, often referred to as “China’s Silicon Valley.” The Center, covering over 21,500 square feet, will include research and development space dedicated to creating new products and packaging and house several laboratories. Also, the company plans to conduct studies such as around weight management, sports nutrition and personalized nutrition to better serve consumers.

In China, Herbalife Nutrition opened its first factory in 1998. Since then, the company has grown its presence and now has the upcoming Product Innovation Center in Shanghai, the botanical ingredients center in Changsha and two production technology centers in Nanjing and Suzhou.

Herbalife Nutrition also has manufacturing facilities in Lake Forest, CA and Winston-Salem, N.C.

Herbalife to Pay $20 Million for Misleading Investors

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The Securities and Exchange Commission announced that Herbalife Nutrition Ltd.—a direct selling company with operations in over 90 countries— has agreed to pay $20 million to settle charges that it made false and misleading statements about its China business model in numerous U.S. regulatory filings over a six-year period.

According to the SEC’s order, in quarterly and annual SEC filings between 2012 and 2018, Herbalife told investors that while direct selling is permitted in China, multi-level marketing is not, and that as a result, Herbalife’s business model in China differed from that used in other countries.

According to the SEC press release, Herbalife’s representations were untrue because it employed a very similar compensation model in China to the one it employed in every other country. Herbalife purported to pay its service providers based on hours worked. However, to calculate service providers’ eligible compensation, Herbalife first calculated individual compensation using its worldwide system, which is based on downline purchases. Herbalife then made certain immaterial adjustments, and ultimately paid the service providers compensation in amounts almost the same as the amounts calculated using the worldwide system. Service providers did not themselves list their hours or describe the services they purportedly performed on a form they attached to their invoices. Rather, the service provider forms were pre-printed by Herbalife’s business in China with the number of hours for various, specific services on the forms sent to the service providers for their signature. The order finds that Herbalife’s public statements concerning service provider compensation were false and misleading and deprived investors of the information they needed to fully evaluate the risk of investing in Herbalife stock.

“Herbalife deprived investors of valuable information necessary to evaluate risk and make informed investment decisions,” said Marc P. Berger, Director of the SEC’s New York Regional Office. “When making disclosures to investors, issuers must ensure that those disclosures are accurate.”

Without admitting or denying the SEC’s findings, Herbalife consented to the SEC’s order finding that it violated certain antifraud and reporting provisions of the federal securities laws. The SEC’s order requires Herbalife to cease and desist from further violations of the charged provisions and to pay a $20 million penalty.

Shaklee Installs Peace Pole

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Shaklee Corporation recently installed a Peace Pole, a prominent international symbol and monument to peace, at their global headquarters in Pleasanton, California.

A dedication ceremony took place on Thursday, September 19, to commemorate International Day of Peace. It was held during the Shaklee New Directors Conference, where members of the Shaklee Family were recognized for their contributions in helping their communities create healthier lives.

Peace Poles are crafted by May Peace Prevail on Earth International, an inclusive, all-embracing nonprofit organization associated with the Department of Public Information at the United Nations. Their grassroots global movement aims to bring people of various cultures, faith traditions and political ideals together as one united heart and mind.

May Peace Prevail on Earth International Executive Director Fumi Johns Stewart explained, “Planting a Peace Pole is a way of spurring people to inspire, awaken and uplift the human consciousness around the world. It is very fitting to have a Peace Pole awarded to Shaklee, a company whose mission is to give people the opportunity to live a life of energy, meaning and purpose.”Fumi, along with veteran and peace activist Danny Garcia, presented the Peace Pole to Shaklee Chairman and Chief Executive Officer Roger Barnett.

DSA Applauds California Governor Newsom for Signing AB 5

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The Direct Selling Association (DSA) applauded California Governor Gavin Newsom for signing Assembly Bill 5, which includes an exemption for direct sellers.

Without the exemption, the bill would have created an uncertain framework for more than 2.2 million Californians involved in direct selling.

“We want to thank Assemblywoman Gonzalez and interested stakeholders for working with DSA and including exemption language,” said DSA President Joseph N. Mariano. “This language will allow the direct selling industry to continue thriving in California and independent salespeople to continue having the freedom and flexibility to operate their businesses. We want to thank all our member companies who engaged with elected officials in California to express the importance of the business.”

The language in the bill incorporates state Unemployment Insurance Code Section 650, which has classified direct sellers as independent contractors for over 20 years. DSA hopes as state and federal elected officials consider similar bills to include similar language that direct sellers are clearly and specifically independent contractors.

Amway’s Nutrilite to Help Power Kids’ Food Basket’s Farm

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Kids’ Food Basket recently opened a new farm and distribution center that will draw from Amway and Nutrilite’s rich farming history.

Amway has partnered with Kids’ Food Basket, a nonprofit that address food insecurity and childhood nutrition near Amway’s world headquarters in Ada, Michigan, for more than 15 years. The experts behind Nutrilite’s certified organic farms play a pivotal role in providing nutritious meals to thousands of children every day. The new roughly 10-acre farm will draw from Nutrilite’s farming history to help grow healthy, chemical-free and sustainable produce with maximum yields.

“Amway is uniquely positioned to help in two ways,” says Amway Vice President of Manufacturing Brian Kraus. “One is our core vision. Our core vision is about helping people live better lives. That’s exactly what Kids’ Food Basket is all about. In addition to that, we have tremendous expertise in farming all around the world. In fact, a lot of our talent and scientists from California and Washington state have worked on this site to help Kid’s Food Basket build its capabilities.”

Kids’ Food Basket CEO Bridget Clark Whitney says she sees the positive results every day. “It’s been incredible to have this partnership and this expertise, and the philosophies that come from Nutrilite to be put to use for children right on the farm right in west Michigan right in the middle of the city.”

Many of the children in the area will have the opportunity to visit the farm and get their hands dirty (literally) learning about where healthy and delicious food comes from. The farm is also a place where all of Amway’s West-Michigan employees will be able to volunteer. It takes several hundred volunteers to produce the more than 8,000 healthy “sack suppers” distributed by Kids’ Food Basket each day. The goal is to grow that number with the help of the new headquarters and farm.

Youngevity’s HempFX Brand Launches in Japan

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Youngevity International, Inc. recently announced the launch of its phytocannabinoid-rich hemp oil product line, HempFX, in Japan.

The company disclosed that three products within the HempFX line have gained the appropriate approvals and are now available for purchase in Japan: HempFX Soothe, HempFX Capsules and HempFX Tincture.

“HempFX is an ideal representation of our plant-based approach to product development,” said Youngevity Chief Executive Officer Steve Wallach. “These select products are being offered in this initial launch, and we expect the HempFX line will continue to grow, with more products becoming available for sale in Japan in the near future. This product launch has really been creating excitement in the Japanese market and we expect that it will provide significant growth within our distributor base in Japan.”

Youngevity is one of the first U.S. companies to gain the required approvals and to begin shipping a line of hemp-derived products in Japan.