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ARIIX and LIMU Merge to Increase Sales Opportunities for Representatives

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Bountiful, Utah-based ARIIX recently announced its merger with LIMU, an Orlando, Florida-based direct sales company.

According to ARIIX, the partnership formed due to shared values in industry innovation, enhanced product offerings and strong projected sales figures.

“Both ARIIX and LIMU were founded on the philosophy of truly advocating for the independent business builder,” said Dr. Fred Cooper, ARIIX CEO and founder. “Our combined forces will provide new business-building opportunities for our Representatives and position us for dynamic growth. We look forward to getting to know all the LIMU Promoters and customers and we give them our warmest welcome.”

In 2018, ARIIX welcomed 85,000 new Representatives and 59,000 new customers, experiencing 24 percent revenue growth for a total of $220 million in annual sales. Thirty thousand LIMU Promoters and customers will be unified with the current ARIIX Representative base through the merger. During the gradual integration process, both companies’ businesses will continue to operate as usual.

“This is a life-changing move for LIMU Promoters,” says Gary J. Raser, LIMU founder, president and CEO. “This partnership is the culmination of a series of strategic steps that have occurred throughout 2019 and we couldn’t be more excited. In ARIIX, one of the fastest-growing companies in our industry with incredible product diversification and a strong international presence, we have found the best possible partner to drive our growth plans and be the cornerstone of our future.”

Mary Kay Foundation, UT Southwestern Partner to End Cancers Impacting Women

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The Mary Kay FoundationSM recently announced a $500,000 grant to fund a groundbreaking global fellowship program with long-time partner UT Southwestern Medical Center.

The new one-year fellowship will offer up to five international post-doctoral researchers the opportunity to conduct cutting-edge cancer research at the world-renowned UT Southwestern facility in Dallas, and allow them to continue research activity in their native country. This new grant program supports The Mary Kay Foundation’s continued commitment to ending women-related cancers around the world and marks the first time the Foundation’s cancer research grants program goes global.

“Mary Kay Ash, our founder, saw firsthand the impact that cancer had on our independent beauty consultants, their families, and women around the world,” said Ryan Rogers, board member of The Mary Kay Foundation and grandson of Mary Kay Ash. “It became a mission for her to eradicate cancers affecting women. Our expanded partnership with UT Southwestern will allow us to continue that lifesaving work on a global scale.”

The Mary Kay Foundation has a long-standing partnership with UT Southwestern through a strong collaboration with Dr. Jerry W. Shay, cell biology professor at UT Southwestern and The Mary Kay Foundation Distinguished Professorship honoree. Dr. Shay has served as chair of the scientific review committee for The Mary Kay Foundation Innovative/Translational Cancer Research Grant Program in the U.S. for the last 22 years and will now serve as principal investigator over the new international fellowship program.

“Expanding the program internationally will allow us to focus on cancers that affect women the most,” said Dr. Shay. “We plan to identify a group of dedicated postdoctoral candidates from around the globe, invite them to Dallas, and equip them with all the tools and resources they need to continue their groundbreaking research in our outstanding cancer lab. Their work could have a tremendous impact on how we understand and treat cancers around the world.”

Since its establishment in 1996, The Mary Kay Foundation has supported Mary Kay Ash’s dedication to advocating on behalf of women and her vision of creating a cancer-free world. To date, The Mary Kay Foundation has awarded nearly $23 million to support the work of 225 top women-related cancer researchers across the U.S., funding efforts to search for cures for breast, uterine, cervical and ovarian cancers.

“Fighting cancer was personal for Mary Kay Ash,” said Dr. Gildea, chief scientific officer at Mary Kay Inc. “And it’s personal to us. She would have been proud that we’re continuing her legacy of serving women on an even larger scale.”

Perception Doesn’t Have to Be Reality

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We need to be more proactive in dealing with our channel’s negative perception.

On Aug. 25, SHOWTIME aired the first episode On Becoming a God in Central Florida, starring Kirsten Dunst. The series is set in a small town near Orlando in 1992, and Dunst plays Krystal Stubbs, a minimum-wage water park employee, who lies, schemes and cons her way up the ranks of the cultish, multibillion-dollar pyramid scheme that drove her family to ruin in the first place.

The show’s premise is a satire of network marketers spreading the gospel of “you can have the lavish lifestyle, attain financial freedom and the American Dream.” The first five minutes of the first episode is packed with cringe-worthy network marketing stereotypes. In the opening scene, for example, Krystal’s husband, Travis, (played by Alexander Skarsgård) is on the couch listening to the first of many upline training cassette tapes on how to start your business. The camera then pans to several products in various areas of their home, all from the company he represents. “Dream a big dream,” says the narrator on the tape he is listening to. “There is a mighty and transcendent place where progress is inevitable….where the pursuit of happiness is a priority and a right to dream is a guarantee. That place is called America.” While listening, he cuts out his dream home and tacks it on his corkboard.

“The SHOWTIME series and its depiction of direct selling is something the industry should take seriously, but we shouldn’t overreact. If you overreact, there’s a risk that we create a perception that the show has hit a nerve or hit too close to home – that it’s revealing a ‘hidden truth,’ and that’s certainly not the case.” – Crayton Webb, Owner, CEO, Sunwest Communications

If the first three episodes of the 10-episode series are any like the seven to follow, it will provide naysayers enough network marketing meme clips to fill our social media channels for years to come.

“It’s not uncommon for Hollywood to dramatize and mock,” says Crayton Webb, Owner and CEO of Dallas-based Sunwest Communications, which represents several direct selling clients.  “Kirsten Dunst certainly has a track record with projects she’s taken on previously, mocking both cheerleaders and pageants. Direct selling is in good company, and sometimes imitation can be a form of flattery.”

For the remaining episodes, there’s little doubt the show’s producers will create plotlines ripped from the headlines of direct selling companies that have been in the news the past few decades.

Take it Seriously, But Don’t Overreact

The SHOWTIME series is just the latest in a long list of high-profile perception challenges our channel has faced. Whether or not there’s such a thing as bad publicity has been a matter of various opinions for decades. There’s less disagreement, however, about whether a company should just ignore it and let sleeping dogs lie. “The series and its depiction of direct selling is something the industry should take seriously, but we shouldn’t overreact,” says Webb. “It may be wise for the industry not to take the show too seriously because it’s so over the top. If you overreact, there’s a risk that you create a perception that the show has hit a nerve or hit too close to home – that it’s revealing a ‘hidden truth,’ and that’s certainly not the case.”

Given the show is on a premium cable channel, the exact reach of the show is still up for debate, and Webb suspects the average viewer of the show who either has no experience as a direct seller or simply has a favorite product they routinely buy, isn’t likely to connect the show’s agenda and commentary with their favorite direct selling brand.

“Just like most Americans despise Congress but love their congressman, I think the same is true of direct selling,” he says. “Some consumers may be leery of network marketing, but they love their direct seller from whom they buy their favorite product. In other words, most consumers separate the industry from their favorite brand and product.”

It’s Important to be Prepared

A new direct selling representative, who is just getting his or her business up and running, may have concerns and questions about what they should say if prospects bring up the show or another example of their company or the distribution channel as a whole being the target of pop culture or media scrutiny. The smart approach by direct selling companies, says Webb, is to ensure their sales force isn’t caught off guard—especially in a selling situation—without any knowledge. That can breed distrust and resentment amongst the field. It also could inadvertently cause members of your sales force to express their surprise and fear very publicly on social media. The result is to cause a feeding frenzy on social and draw even more attention to the show.

The misunderstandings of our industry are sometimes rooted in truth. There are people who have behaved badly, and maybe we haven’t always corrected those bad behaviors quickly enough. We need to call out any bad actors; if we don’t it hurts everyone.

It’s a careful balance of ensuring your sales force is knowledgeable and aware, without alarming them. “You never want to be behind the eight ball when a crisis hits,” says Webb. “It’s critical to have a communications plan in place that provides a procedure for responding to questions from the field. Start flexing your communications muscle before the crisis hits and work to arm your salesforce with messages and media training so they can be accurate, persuasive communication ambassadors of your brand’s key messages.”

The Way Forward

It’s also important for our channel to continue to distance itself from any narratives that perpetuate the script that network marketing is a grandiose plan where someone can work hard for a few years until the big money rolls in and then coast on the residual income. The misunderstandings of our industry are sometimes rooted in truth. There are people who have behaved badly, and maybe we haven’t always corrected those bad behaviors quickly enough. We need to call out any bad actors; if we don’t, it hurts everyone.

We are starting to flip the script by becoming more customer-centric, and many companies are reaping the benefits of rewarding activity that directly brings in new customers and representatives. This is the way forward if we are to meet the changing customer and market expectations and stay relevant. But we have to work harder.

Experiential Compensation

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VERVE founder Callum Negus-Fancey is building a powerful, transparent brand through word-of-mouth and using rewards-based compensation instead of cash

As most in our channel know by now, successful gig companies have sweetened the deal traditionally made by direct selling with ready-made customers, no startup fees and same-day pay. Gig worker numbers keep rising, and by 2020, Intuit, the owner of TurboTax, predicts they will comprise 43 percent of the workforce.

Direct selling may have no competitor more formidable than the gig. Whether it’s an Airbnb garage conversion, a crafty Etsy shop or leveraging a car through Lyft or Uber, gigs are supplanting personal revenue streams once produced solely by direct selling.

Traditional big dream pitches like financial independence and luxurious lifestyles that use cash compensation aren’t enough anymore. Direct selling’s gig counterparts understand the short-term, tangible needs of their workers—companies within our channel must too.

“Industry executives can either continue with head-in-the-sand thinking and pretend this trend won’t affect the future of direct selling, or they can take a step back and allow themselves to hear the alarm bells and make changes before it’s too late,” Direct Selling News warned last November.

Evolutionary progress at revolutionary speed—today’s re-evolution has companies scrambling not only to meet Amazondriven consumer demands for one-click purchase and one-day ship but also to make compensation plans easier with quicker payouts that attract the coveted millennial.

VERVE: Focusing On The Experience Spectrum

With that ongoing re-evolution in mind, SUCCESS Partners’ Stuart Johnson invited Callum Negus-Fancey, founder and CEO of Verve.co, to SUCCESS Partners University a few months back to chat about building a platform that enables people to bring their friends to the best experiences and share rewards.

“We’re very focused on the experience spectrum. It’s very, very big. If you take our demographic, which is really 16- to 28-year-olds, they’re spending north of a trillion globally on experiences every year. But if you take the kind of commission that we can take and the percentage of inventory that’s available for a product like ours, you’re talking about a $20 billion addressable net opportunity every year,” Callum says.

Selling Experiences Peer-To-Peer

At 17, Callum marketed dance events to fellow U.K. teens. “We sold a lot of tickets through peer-to-peer. We built these huge networks of kids across the country, who sold tickets to their friends. But rather than cash, it was for rewards: sell eight tickets, get to go free; sell 25, get to go backstage,” he says.

Rewards compensation carried forward to Verve, a global platform that integrates directly with major ticketing providers and tech partners. Verve started in music, which comprises 50 percent of revenue, and added travel. Now sports, restaurants and bars are targets.

“Ultimately, we’re a marketplace where people can sell experiences and products to their friends and earn rewards for doing it. So they’re bringing their network, whether it’s to a travel destination, a music event, and then they’ll earn free trips, free tickets, and there’s always something in it for their friends as well,” Callum says.

The Rewards Of Word-Of-Mouth

“The fact that it’s reward-based is a really important part of the model, Callum says. “We want to create really genuine, authentic conversation. I think because of that we’ve attracted an audience who really does put their network ahead of themselves, which in turn means it creates a much richer buying experience for the end customer. They feel like they’re buying from someone that they know and they can trust.”

“You don’t need to be persuaded of something to become aware of it, but you do need to be persuaded of something to want to buy it. And I think that’s where word-of-mouth obviously wins. It’s a two-way conversation. There’s obviously an accountability and a trust that exists through that channel that doesn’t through others,” Callum says.

Word-of-mouth isn’t simply one-to-one marketing. It’s more effective to think of it as many-to-many. Brands produce content worth sharing, many people engage, many people share with one another and in so doing strengthen relationships. The persuasion is tied to subculture, knowledge or passion. As it’s magnified over time, it becomes a more empirical influence, which sways purchase decisions.

Universal Drivers Of Intrinsic Motivation

From the whys of wealthy teens selling tickets to earn status with friends to millions of uniquely, authentic micro-messages delivered through omni-channel word-of-mouth today, Verve leverages intrinsic motivation. Callum built the whole company around it.

Rather than methodical goal setting, Verve focuses on selfawareness by creating space for people to find passions, explore what gives and takes energy, and parse differences between fearing and not being good at something. They invest heavily to help advocates overcome. This builds loyalty.

Intrinsic motivation keeps employees engaged too. ROI employee engagement targets rank at nine across the board, but liking a job hinges on useful work, so Verve focuses on quality, not quantity and heavily rewards impact versus effort. Voluntary churn is negligible.

“Cultural fit is an oxymoron for diversity, and we all know that diverse teams outperform teams that aren’t,” Callum says. “People have different values—that’s the point. They don’t really change. So we don’t think about it from that perspective. We think about it much more top-down. What’s the kind of environment that we want to create? It’s rooted in this idea of the universal drivers of intrinsic motivations so relevant to everyone.”

He warns, “In a knowledge-based company, your biggest wasted resource is human time and human potential. I think this kind of culture gets rid of that waste.”

Transparent As Glass

Money-based compensation models can feel tired to millennials and breed skepticism if transparency is lacking. People notice that gap between promises and reality. “We try to promise quite little and just talk about the direction that we’re going, but then create lots and lots of tangible proof points over time that back up those beliefs. I think this creates a much more sustainable momentum,” Callum says.

Compensating with rewards rather than money, Verve is essentially built with glass. Gone is the skepticism and stigma associated with cash compensation plans. This highlevel transparency creates better buying experiences for end customers and safeguards the company too. Verve requires potential advocates to apply, and Verve decides who gets into the platform and who doesn’t.

Takeaways For Direct Selling

So if it works for Verve, could similar philosophies help direct selling companies bridge the gap between promise and reality? What would it look like to shift a portion of compensation toward rewards? Would it help in getting rid of the wheeler-dealers and assist in repairing the industry’s reputation?

Verve’s example offers impactful action items that could create a win-win for direct selling companies in short order:

  • Tweak messaging and get rid of direct selling jargon that conjures up negativity. Keep it simple and transparent.
  • Appeal to representatives’ intrinsic motivations and help them conquer fears.
  • Goals are goals, but teach selfawareness—so people find passions. Everyone’s happier, engaged and more successful when they love what they do.
  • Lastly, don’t be afraid to mix it up. People have different cultural values, and that’s the point. Bring diversity of thought to the table and see productivity rise. Shake things up, move people around and modify work to encourage peak performance in ways that value quality and impact over quantity and effort.

Fine and Forever

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TOCARA
Founded: 2008
Headquarters: St. Laurent, Quebec
Top Executives: Randall Markus, Founder and President
Products: Sterling Silver and Stainless Steel Jewelry

A lifetime jewelry manufacturer fell in love with direct sales and put the two together in TOCARA.

Old Montreal is where Randall Markus got his start in the jewelry business decades ago. Today, Markus serves as Founder and President of TOCARA, a Canadian direct selling jewelry company that operates in Canada and the United States.

What started as a part-time, summer job quickly turned into a passion for young Markus. Although he started out selling the shell jewelry he made himself, Markus soon branched out.

Romancing The Stone

TOCARA

One day, while Markus stood talking to customers at his table, a man approached him with a proposition. “A wholesaler who was importing Italian sterling silver asked if I would like to sell some of his jewelry at my table,” said Markus.

The Italian silver jewelry ended up selling very well alongside Markus’ pieces—so well, in fact, that the Italian importer ran out of stock soon. The young entrepreneur had a problem: he needed product to sell.

“I went to the Italian trade commission, which gave me the names of Italian suppliers,” explained Markus. “I flew to Italy and forged relationships with two major Italian suppliers.” He was only 17 years old at the time.

“Our vision is not to be the biggest—it’s to be the best.” —Randall Markus, Founder and President of TOCARA

Next, Markus set his sights on two of Canada’s leading department stores. He decided to approach them to see if they might be interested in the jewelry he was making and designing.

They told him to send some sample shipments, and they would see how his jewelry sold in a few of their stores.

A few months later, Markus got the good news that both stores wanted to sell his jewelry nationally. The only problem, they told him, was that they didn’t think Markus could handle the distribution for hundreds of stores by himself.

“I promised them if they gave me the chance, I would make it happen,” says Markus, “I set my basement up into a production line, and my whole family worked with me. I made my first million dollars in sales when I was 18 years old. A business was born.”

Avon Calling

By the mid- to late 1980s, Markus had designed and manufactured proprietary pieces that caught the interest of a large direct seller: Avon. “I built a sizable business with Avon Canada,” Markus says, “I designed jewelry, and I manufactured it for them.”

Business kept booming for Markus, who by now was traveling overseas regularly to visit suppliers. He traveled to a factory in Thailand that specialized in gems of the mineral corundum (which include sapphires and rubies). Markus watched as the factory workers culled through the sapphire gemstones and threw the dark-colored sapphire gemstones into a big vat.

TOCARA“I asked them what they were doing,” Markus says. “They said, ‘This is our discard pile.’ I asked, ‘Would you mind giving me some samples?’ I brought them back to Avon U.S. Our first real deal with Avon U.S. was a collection we called Midnight Black Sapphire. By the mid-1990s, we were Vendor of the Year for Avon U.S., two years in a row.”

It was during this time when Markus saw the enormous potential of direct sales. “It wasn’t just the power of the channel, it was seeing how they recognize people and how they use interpersonal sales rather than retail sales,” he says. “I am a lifetime jewelry person who fell in love with direct sales. That’s who I am.”

Today, Markus serves on the Board of Directors of the Direct Selling Association of Canada, a position he’s held for two years, with another three-year term ahead. “I love giving back and sharing ideas,” he says.

The Alchemist

By 2008, Markus had founded TOCARA, whose corporate headquarters are in St. Laurent, Quebec, Canada. The company’s name, TOCARA, is of Italian and Spanish origin, meaning “to touch.” “We want to touch hearts, minds and spirits with fine and forever jewelry,” Markus says. “That’s how we set ourselves apart.”

TOCARA is unlike other fashion jewelry companies that primarily sell costume jewelry. “The problem with costume jewelry—is it won’t last forever because it’s plated with gold or silver that will wear off, exposing the cheaper metal underneath,” Markus explains.

“That isn’t the case with our jewelry,” Markus says. “We’re fine and forever. With TOCARA, you can buy a piece of jewelry for essentially the same cost as costume jewelry, and it lasts a lifetime.”

Indeed, 50 percent of TOCARA’s styles are $65 and under, and every purchase comes with a lifetime warranty. TOCARA’s collection features beautiful jewelry made of rhodium-plated sterling silver and stainless steel.

“I made my first million dollars in sales when I was 18 years old.” —Randall Markus, Founder and President of TOCARA

“The company’s introduction of stainless-steel jewelry was a turning point in its history,” explains Markus. Stainless steel is a homogeneous metal, meaning it’s not plated, plus it’s hypoallergenic, durable and affordable.

“We have worked very diligently over the last decade to become innovators and industry leaders in the production of beautiful women’s and men’s stainless steel,” he says. “We want to be the true bridge between fashion and precious metal.”

A Boutique Feel

According to Markus, TOCARA has several thousand consultants, generates nearly $20 million in sales in Canada, and has just started its journey in the United States. TOCARA’s exclusive jewelry has the look and feel of a boutique product—and so does the company’s culture, which Markus describes as nurturing, caring and fieldcentric.

TOCARA“We run our business like a boutique business,” Markus says. “We strive to keep those very personal relationships with people because we have that boutique mentality. No matter how big we get, consultants can count on TOCARA. We will support their decision to be a part of the TOCARA family in ways that will surprise them.”

TOCARA has operated in Canada for 11 years now, so it’s established. “We’ve honed our skills and built a beautiful business in Canada, so that when we go to the largest consumer market in the world—the United States— we can go in as a mature business,” Markus says. “Our vision is not to be the biggest—it’s to be the best.”

TOCARA strives to offer jewelry that has “crossborder appeal,” meaning it can appeal to all ages and demographics—in Canada, the United States and in other countries around the world.

As a direct selling company with a party-plan model, TOCARA sees today’s technology as the stimulus for both challenges and opportunities. The challenge is to find ways to tear people away from their devices and texts and posts—and attract them to in-person parties. But that’s where the opportunity lies as well.

“People today no longer have that face-to-face interaction—they crave it, but they don’t get it,” Markus says. “Party plan gives people the ability to return to social interaction. Jewelry doesn’t talk in a showcase. But jewelry can speak through the eyes, ears and mouths of people in a social environment.”

After spending decades in the jewelry business as well as in direct selling, Markus is at a point where he can see how everything that’s happened in his life has led him to this point. What legacy does he hope to leave?

“I want to be able to say I built a legacy direct selling business that stood the test of time—that endured for generations to come,” Markus says. “There is no better feeling in the world than to be able to watch other people’s success through something that you built.”

TOCARA Cares Supporting Breast Cancer Research

It only takes eight degrees of separation for you—and all of us—to know someone whose life has been forever changed by breast cancer. According to the U.S. Department of Health and Human Services, one in eight women born today in the United States will get breast cancer at some point.

The good news is that most women can survive breast cancer if it’s found and treated early. That’s where TOCARA shows its true, caring colors. TOCARA avidly supports breast cancer research in both the U.S. and Canada as its corporate charity cause.

“By helping to fund awareness and research into the causes of breast cancer, TOCARA contributes to preventing this disease that is near and dear to so many,” says Randall Markus, TOCARA Founder and President. The disease has personally touched Markus’s family members. “It all started with my wife’s sister, Debbie, and her battle with breast cancer six years ago,” he says. “She is a survivor today.”

Even TOCARA’s consultants support the cause through their donations. “Breast cancer has been a cause our whole company has gotten behind for many years now,” Markus says. “It is truly a part of our DNA at this point.”

TOCARA is proud to have developed a Breast Cancer Initiative program—the Debbie program—which was developed to bring awareness and raise funds in support of Breast Cancer Research. This program has raised donations of $190,000 to date.

How to Better Leverage Your Digital Traffic

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Q&A with John Oates

In our July issue, we introduced our DSN Digital 100 of the top companies who have a sound digital strategy. John Oates, Founder of JPO Digital, and the VP of Digital Marketing for SUCCESS Partners, helped us gather the data for that list. I recently sat down with him to get a little more insight into how direct selling companies can better leverage their digital traffic.

Why don’t you touch on a few of the key points of how you gauge whether a company has an effective digital strategy?

Digital strategy, social media specifically, and direct sales should go hand in hand. Both industries are reliant on one-toone engagement—as well as connection, communication and content. Oftentimes, I feel like direct selling companies and even distributors shy away from this one-to-one engagement. Then even worse, it’s oftentimes misused, because people don’t know how to use it. So, it turns into a shotgun blast of “Check out my product/click here to buy my product” and that can come across as spamming.

“…while social media size is important, if it’s not accompanied by a comparable or impressive engagement rate, size doesn’t really matter.”

The four key metrics of a sound digital strategy are: social media size, social media engagement (those people engaging with that page within a 30-day period), unique visitors to the website, and page views on the website. Once people get to your site—how active are they? Are they leaving after viewing one page? Or are they sticking around and looking at ten pages— which kind of gives us an idea of how sticky a site is. These four categories give us the total for the DSN Digital 100 list, and we feature the top 25 in each category each month.

What are some of the myths when it comes to social media size and engagement?

We live in an age now where size is perceived as influence. Everybody wants to have a huge following and boast a big number—and that’s certainly important to some degree. Having that big number gives site visitors a sense of wow— this is an established company. So size is definitely important. I cut my teeth at Vayner Media as one of the first 10 employees hired there, and engagement is everything to Gary Vaynerchuck. So, while social media size is important, if it’s not accompanied by a comparable or impressive engagement rate, size doesn’t really matter. I would rather have 100,000 people that care about what I’m saying than have 10 million followers that are passive. Those hundred thousand engaged people can have a much greater impact than 10 million people that don’t care about what you’re saying.

“…people look at social media as this magic sauce that everything they post will end up going viral. And it just doesn’t work like that. You need to have consistent engagement and rapport with people to ultimately get them to take the action that you want them to take.”

How can our channel better leverage their social media traffic?What other opportunities exist, that maybe our channel isn’t really thinking about right now?

I think it’s important to engage those who are more focused on products, science, and benefits. Because that slow conversion can turn an interested and engaged follower into a customer. Social media is simple, but it’s not easy. It takes very consistent daily engagement to maintain a consistent engagement rate, and it takes balance. Consider what you are posting daily that’s meant to educate and what are you posting that is meant to have an impact on your sales. A lot of times, people look at social media as this magic sauce that everything they post will end up going viral. It just doesn’t work like that. You need to have consistent engagement and rapport with people to ultimately get them to take the action that you want them to take.

What tips do you have for companies in working together with their distributors when it comes to making sure their individual social media message is somewhat consistent with the company’s message?

Creating a guardrails document that very clearly outlines what your distributors can say—and what they can’t say. If you’re looking for content, here’s content that we’ve created and approved for you. Content that is compliant with community guidelines, but still hits the message. Here’s how to share it. This is how we would like you to talk about the products, and here’s the correct way to use these platforms.

I think the industry gets a bad rap of distributors being spammers on social media. It’s not that they’re spammers it’s because they don’t know how to use the platforms, or haven’t been taught the correct way to use social media. So I think that by putting some effort into education and putting up these guardrails, distributors will see a lot more gains from their social media presence.

Rewarding the Baby Steps

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How companies can incentivize basic but critical business-building action.

Rewarding and Incentivizing a distributor field isn’t all about recognizing those long-term leaders who stay at the top. In fact, many companies are moving in the direction of rewarding and incentivizing distributors who achieve smaller, more attainable milestones based on the specific action steps companies want them to take.

Why It’s Important: Direct selling companies continue to face challenges in a gig economy. More opportunities to earn extra income on a part-time basis are increasing through the rise of Uber and Lyft, Airbnb, Upwork, Etsy, or just buying and selling through online marketplace platforms. These opportunities typically require little to no experience or investment, are based on individual performance, and their pay structures are simple to understand.

What’s Changing: Many companies are developing incentive and recognition programs to reward the more basic action steps and achievements focused on newer distributors. These incentive programs could last a week to several months. Several key factors make them work, but the overall goal is like any other incentive program: to create a culture where people feel valued, recognized and challenged while encouraging the behaviors that lead to long-term growth and leadership development. Companies also use these programs to train to the specific business-building practices they want distributors to take anyway.

Two Main Types Of Incentives: Results-based incentives involve hitting a bonus, enrolling a number of customers within a certain time period, personal sales volume, or sponsoring new representatives. Actionbased incentives could include handing out samples, making follow-up calls, or inviting people to watch an opportunity video.

What’s Working: “There should be a strong social connection between the recognized person and their peers,” says Dan Jensen of Dan Jensen Consulting. He also details a few fundamental characteristics of a successful incentive program:

  • Align incentives with the compensation plan. Make sure people are not distracted from the comp plan.
  • Incentives can change, so be prepared to change program budgets.
  • Most incentive programs last about three months, longer for more expensive programs.
  • Different incentives should reward different people based on actions and achievements in line with their experience level.
  • Don’t just explain what to do. Teach people how to achieve the goals.
  • Use incentive programs to gather info to develop future programs.

Industry Examples: Some specific examples for rewarding and recognizing newer distributors include a quick congratulatory call from a corporate leader, social media shout-outs, shifting more compensation payout to early achievements, a quarterly newsletter or magazine recognizing promotions and telling success stories, encourage field leaders to recognize smaller achievements that remain in line with larger corporate goals, creating achievable incentive trips based on personal action, updating the field on the race to achieving an incentive to encourage bursts of action.

How One Company Does It: MONAT President Stuart MacMillan shared some insight as to how they are shifting focus to reward those basic but core businessbuilding milestones. Early on, the company decided to shift a larger portion of the payout to new distributors, called Market Partners, who reach initial goals.

“We decided to put a disproportionate amount of the compensation plan payout to what we call Smart Start,” Stuart says. The Smart Start goal is to enroll four customers and one Market Partner in a month, then to duplicate that. Stuart refers to it as a “building block” approach.

“MONAT’s Smart Start payout plan shifts a larger portion of the payout to new distributors, who reach initial goals.”

“We knew it was important for people to be able to get a check,” he says. “We try to make sure the payouts are substantive at that point because it just drives people to do the next thing.”

MONAT’s corporate leaders determined that even earning an extra $500 or more per month would make a big difference for most families. So, they began changing how they defined and referred to terms such as “life-changing money.” Stuart says earning enough to cover a car payment or send kids to preschool could be quite life-changing for most families. That’s why the company now celebrates and touts the number of people earning at least $500 per month.

Competition and Recognition: MONAT has developed smaller competitions and incentive trips based on highly specific actions and goals. Larger, yearly incentive trips still exist, but some smaller trips, for example, are awarded based solely on personal sales volume. Stuart says this really reveals those who are taking the most action within a certain amount of time. It also evens the playing field for all Market Partners, no matter if they’re brand new or have been building a business for years.

“We have to recognize and reward behaviors that will lead to leadership down the road,” Stuart says. “They may be baby steps, but we know that they are behaviors that they can repeat and repeat.” He adds that since it’s difficult for new Market Partners to think a full year ahead, promotions geared toward newbies usually last 30 to 60 days.

MONAT also sends out a quarterly recognition magazine that profiles new promotions to certain ranks, and each is given equal space regardless of rank. The cooperate team also works closely with field leaders who create their own promotions and competition within their teams, making sure they match the company’s overall goals for the coming months.

What’s Your Recognition Program Rhythm?

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When direct selling companies are just starting out, there are countless issues that must be faced, decisions to be made and challenges to overcome. However, during all of this planning, don’t forget the overwhelming importance of recognition for your distributor network. If this is not well thought out and executed from day one, it will only get more complicated and difficult later.

Why are recognition programs so important? Aren’t commissions and the freedom of running one’s own business enough to motivate your independent sales force? Certainly these factors are reasons that a distributor got into the business in the first place, but these alone will not keep them engaged and motivated over the long term. Appreciation is a fundamental human need and one that needs to be reinforced—often. However, a Gallup poll in 2018 found that only 1 in 3 U.S. workers strongly agreed that they had received recognition or praise for doing good work in the previous seven days. Gallup recommends that recognition should be given at least weekly—and as close to the achievement as possible to reinforce company values. Recognizing people for their good work sends an extremely powerful message to not only the recipient but to their team, other distributors and even customers.

Direct selling companies need recognition programs quite possibly more than any other industry, given their independent sales force are commission-based in remote locations running their own businesses. That is why they need to have a myriad of recognition programs for the many types of behaviors they want to incentivize and the many types of consultants they engage.

Some of the programs that should be included are:

  • Career Level/Rank Recognition
  • Sales Awards
  • Longevity Programs
  • Short-Term Promotion Incentives
  • Ad-Hoc Recognition

Each of these programs reinforces different company goals, and each requires a different type of thinking to implement successfully.

“Recognizing people for their good work sends an extremely powerful message to not only the recipient but to their team, other distributors and even customers.”

Career Level /Rank Recognition

A career level program shows a consultant how they will move forward with the company if they are successful. You’ll want to create a well designed Career Level or Rank program that communicates the company’s direction, provides opportunities for personal and professional growth and establishes measurable goals and objectives. Your business success depends on how you cultivate your distributor network into productive, passionate, quality-oriented consultants.

Some ideas to consider include:

  • Founders Clubs & Charter Member Clubs are an exceptional way to begin recognizing your initial distributor network. These clubs create a critical connection, a feeling of camaraderie and a sense of “we can do it” that is especially important as the organization solidifies its foundation.
  • As an organization grows, companies need to keep an eye on their programs and institute expanded achievement/career levels for additional recognition. Even at the earliest stages, think far out and include levels your distributor network can strive for in years to come.
  • Much like a company’s logo and product selection, as the years go by, your recognition programs need to be refreshed with more modern style and feel. You wouldn’t let the products your company sells became dated, so don’t do it with your recognition programs.

Sales Awards

Sales award recognition seems fairly straightforward on the face of it. However, companies need to consider at what level they will begin recognizing sales achievements, whether they consider only annual sales or lifetime sales, or sales just over a particular promotional period, and how many levels will be recognized. It is better to have recognition at many sales levels so that a consultant’s next sales milestone is not a huge step, but instead an achievable one.

Longevity Programs

People need to know they are valued over the long term, not just in “what have you done for me lately” ways. Some successful ways to reinforce that you value your distributor network’s commitment over the long haul are years of service recognition, lifetime sales, and mentor/trainer recognition.

“Your business success depends on how you cultivate your distributor network into productive, passionate, quality-oriented consultants.”

Short-Term Promotion Incentives

This is a way to pump up sales when they might normally be low. Promotions can help deal with seasonal lulls or other predictable downturns in the annual sales cycle. They also provide a way for your distribution network to receive quick feedback-recognition for their sales and other business efforts. Instead of having to wait for the annual convention, or until they rise to the next career rank, they are awarded almost immediately for a job well done.

Ad-Hoc Recognition

In addition to more formal recognition programs, ad-hoc recognition is a great way to “catch people doing good things” and recognizing them for it. This kind of recognition is best done by one’s direct upline supervisor as on-the-spot as possible. Sales managers should come up with something unique that resonates with their downline. Perhaps it is the “cactus award” for a sales team based in Arizona, and whoever wins this award is given a tiny cactus plant in a pot with the name of the award and date on it. Whatever the award is, it should be something that recognizes good work right away, that motivates the person to do even more, and solidifies the team. If the award can be presented in front of the whole downline team—all the better.

As you create your recognition programs, make sure to keep in mind your company culture and the demographics of the distributors you are recognizing. What works for a health products company may be quite different from what works for companies that sell beauty or financial products.

Achieving business success requires commitment and persistence on many fronts. Don’t let recognition get left behind.

Serving Is the New Selling

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How can our channel assist consumers to make the most of their daily lives, versus the old model of selling them a lifestyle?

In June, 7-Eleven launched an update to its 7Now delivery app to include thousands of new locations—7Now Pins—so customers can order to public spaces. Items include food and drinks and other home goods. The service has real-time tracking, no minimum order, no timeof-day limitation, and consumers can expect to have orders delivered within 30 minutes. 7Now currently covers 27 urban areas in the U.S.

Who said convenience stores couldn’t get more convenient?

Two thoughts for you to ponder:
Convenience-loving consumers enjoying instant access to an ever-growing number of supporting services and tools (both offline and online), brands urgently need to hone their culture and focus on assisting consumers to make the most of their daily lives, versus the old model of selling them a lifestyle.

Here’s why consumers are embracing brands who serve:

  • For consumers, time, convenience, control and independence are the new currencies: this need requires direct selling companies and their field to turn from selling to “assisting.”
  • Consumers are longing for institutions that truly ‘care’ than being purely practical. This too requires brands to be more service-oriented in all facets.
  • On top of all of the above, the current mobile online revolution is shifting these consumer expectations even further into the always-on, instant gratification online arena.

For brands, this means that there are now endless creative and cost-effective ways to deliver on this need to assist rather than sell.

EVOLUTION OF THE THIRD PLACE:

Wikipedia defines the third place as the social surroundings separate from the two usual social environments of home (“first place”) and the workplace (“second place”). Examples of third places would be environments such as churches, cafes, clubs, public libraries or parks.

Domino’s recently leveraged this idea and added a similar feature in 2018. If you’re hungry and hanging out at the beach and don’t want to move, then Domino’s will now deliver a pizza to you, even if you don’t have a full address to give, all via their website or mobile app.

More than 150,000 Domino’s “hotspots” are available in the U.S., including famous landmarks and recreation grounds such as the James Brown statue in Augusta, Georgia, and the Tommy Lasorda Field of Dreams baseball field in Los Angeles. Customers can choose a hotspot close by and provide instructions for delivery drivers to find them. They then get text messages updating them on progress, including the estimated time of arrival of their pizza.

IT TAKES RADICAL THINKING:

This is yet another example that customer expectations are never satisfied or stand still. Think radically about expanding the means and variety your business can deliver. Busy, choiceladen and demanding consumers will reward brands that go the extra (last) mile. How will you out-convenient your competitors?

Consumers traditionally had pretty firm ideas about how locations (home, office, school, church, etc.) fit into their lives. Is this example a glimpse of a future with a less rigid designation of places? One where a park is more than a park, and a store is more than a store. Consumers can already use these locations to access more and more services, and perhaps eventually, whatever they need at a given moment. In a world of ubiquitous delivery the third place can be anywhere! How might this evolution impact your business?

Expanding Gary’s Vision

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Young Living
Founded: 1994
Headquarters: Lehi, UT
Top Executives: Jared Turner, President and
COO, Mary Young, CEO
Products: Essential Oils

Young Living has an ambitious plan to elevate the company’s positive impact on the Earth, on communities, and on families around the world.

In 1994 when young living lifted off in its essential oil journey in direct selling, few could have predicted how far it would travel. But Founder D. Gary Young saw it clearly. Perhaps, it was because only he knew how to harness his own maverick style or understood exactly how hard he and his team could work to make it happen.

Leading from the front until his death last year, Young plowed fields, designed and built farm and distillery equipment, and formulated in the lab. Determination, dedication, drive and above all else an unstoppable energy and enthusiasm attracted millions of people to Young Living’s quality products—nontoxic, plant-derived essential oils.Young Living

By 2014, Young Living’s explosive growth outpaced its infrastructure. They invested heavily across the board and slowed expansion into new markets. By 2015, they achieved $1 billion in annual sales and repeated for the next three years. Revenue grew 800 percent between 2013 and 2017, and they reached $1.5 billion in sales for 2017. In 2018 they almost eclipsed the $2 billion mark with $1.9 billion sales.

In this 25th anniversary year, Young Living operates one of the most technologically advanced essential oil distilleries in North America, as well as 24 corporate-owned and partner farms in the U.S., Ecuador, Canada, France, Oman and elsewhere. They have 3,500 global employees, 6 million Members, representing 33 markets.

Young Living’s 5X5 Pledge

They have also embarked on a program they call the 5×5 Pledge, which President and COO Jared Turner believes will not only redefine Young Living’s role as an industry leader, but also elevate the company’s positive impact on the Earth, on communities, and on families around the world.

An amplification of Young’s vision for every home to utilize essential oils, the 5×5 Pledge focuses the company on specific targets, including charitable, environmental, supply chain, sales and customer goals.

Young Living’s 5×5 Pledge reads:

  • Five times more people empowered by the D. Gary Young, Young Living Foundation
  • Five years to zero waste
  • Five or more corporate-owned or partner farms developed each year
  • Five or more new markets opened each year
  • Five million additional households reached in five years

Five Times Charitable Empowerment

Young LivingLong before social media marketing or online amplification existed, Young understood the best way to get the word out about his products was person-to-person, one-on-one, face-to-face, friend-to-friend. Direct selling in its truest sense—that’s how Young Living was built and how it became one of the world’s largest direct selling companies.

“This business model allows Young Living to continue to build human connections; the opinion of a trusted friend will always outweigh flashy marketing campaigns and cold retail experiences, especially where wellness is concerned,” says Turner.

“Sharing the power of essential oils is natural to our distributors. So for those wanting to create additional income, this business allows them to lead with passion and purpose, rather than simply the pursuit of profit,” he says. Culturally, Young Living calls on Members to find their purpose or passion, which often comes in the form of charitable giving.

“We are passionate about collaborating with nature to bring our Members the purest products on Earth.” —Jared Turner, President and COO

“I believe that when God blesses you financially, it is your responsibility to help God’s children who are less fortunate, not only with money but also with giving of your time to help in other physical ways when possible,” Young once told Direct Selling News.

In 2009 the company formalized the D. Gary Young, Young Living Foundation. Today, Members help fund and support the Foundation’s key projects and partnerships. No matter how big or small their contributions, 100 percent of each Member’s donation is used to accelerate the work being done on the ground for the underserved. For instance in Chóngon, Ecuador, Member contributions help support over 300 students at the Young Living Academy—a Pre-K through 12th grade school—as they receive a quality education and have the opportunity to apply for university scholarships. Across Uganda, Ethiopia, and Cambodia, Members are fueling the fight to end human trafficking and restore victims through the Foundation’s partner Hope for Justice. They also help fund wellness and educational opportunities through partners Sole Hope and Healing Faith Uganda as well as the Foundation’s rebuilding efforts in Nepal.

“They immerse themselves in our unique culture that values purpose over profit. They bond with other Members from across the globe during these impactful and life-changing journeys, and carry the experiences with them for a lifetime,” says Turner.

Young Living intends to emphasize their purpose-driven culture and expand Member participation in the Foundation five times in the coming years.”

Five Years To Zero Waste

“Green” is a way of life for Young Living; not only in the attention paid to farming and production practices but also in the place they call home. As conscientious stewards of the planet and its inhabitants, Young Living got serious in the design and construction of a new Lehi, Utah global headquarters.

Buildings impact the health and well-being of people and the planet, but there are construction and design practices that ensure buildings will be less costly to maintain, generate less waste and reduce the use of resources. Young Living opted to utilize such “green building” practices and met the highest standards to qualify for the much-acclaimed LEED and Green Globe certifications.

The unique GHQ design organizes workspace for nearly 1,000 employees around a botanical atrium with two immense skylights and a three-story waterfall. This building is designed to help the company with their green initiatives.Young Living

To get there, Young Living’s GHQ has 20 eco-friendly features including solar roof panels, interior glass walls that maximize natural light, vehicle charging stations, extensive recycling systems, and a water filtration system. Keeping things local, construction materials were sourced regionally, and they even have a farm-to-table café. Additional facilities include a state-of-the-art science lab and research greenhouse.

“Young Living Global Headquarters is setting the standard principles for sustainable practices in our local community,” says Turner.

Farms, Markets, Households

Turner says the company is passionate about collaborating with nature to bring Members the purest products on Earth. “Our farms are the heart of our Seed to Seal commitment, and they will forever be part of our DNA,” he says. “They help us create a more stable and controlled supply chain, allow us to stay on the forefront of essential oil research, and empower our members with the knowledge of where their oils originate.”

Thus far in 2019, Young Living has opened two new corporate-owned or partner farms and three additional ones come online before the end of the year. The company is on track to offer Young Living essential oils in five new markets; however, the specifics about these openings are not yet available.

“With every new market Young Living opens, we open doors of wellness and empowerment to new Members in that market and to talented new employees, who are passionate about making a positive impact,” says Turner.

Both of which further the company’s mission for more people to experience whole-life wellness with Young Living and for the company to gain 5 million new households by 2024.

“We are firmly committed to our pioneering roots. Gary created this company through incessant innovation, consistent curiosity and a genuine love and respect of the Earth. As the founder of the modern-day essential oil movement, we believe the next 25 years will be even more exciting than our first quarter-century,” says Turner. “Our new building capped off our first quarter century with an exclamation point, while providing us with a solid foundation for future acceleration of Gary’s vision of essential oils in every home.”

Young Living takes their role as stewards of the Earth beyond the confines of their headquarters and company interactions with nature. Young Living recently donated 12,000 acres of land near the Duchesne River in Utah to assist in the recovery of the local ecosystem and help return it to its original pristine state.

Partnering with The Nature Conservancy and the Utah Department of Transportation, Young Living wants to ensure that the Duchesne River retains its original course, which is critical to the overall recovery of the ecosystem.

“With Young Living’s ongoing pledge to conserving our planet’s resources and commitment to meeting ethical and environmental standards, we are humbled by our responsibility and visibility as an industry ‘green’ leader. We take our stewardship of the planet seriously. We’re excited to continue that cause in our own backyard at Young Living’s new Global Headquarters building,” says Jared Turner, president and COO.

Raising The Bar

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Our channel needs to update its recruiting message and practices and concentrate on the real motivations and needs to attract future prospects.

recruiting messageAmazon, gig economy competitors and other market forces have taken some wind out of direct selling’s sales.

After years of significant growth, our industry’s U.S. revenue was down 1.6 percent in 2016 and nearly two percent in 2017, according to DSA’s Growth & Outlook Survey.

The surge in alternatives to direct selling and pressure from e-commerce has knocked us back. And we’re just now regaining our balance. Last year U.S. direct selling retail sales was slightly up again, a paltry 1.3 percent over 2017 to $35.4 billion, and the number of business builders—those who regularly buy product at a discount and sell it for a profit—was up 1.6 percent to 6.2 million. The Direct Selling Association (DSA) projects that U.S. direct sales revenue will continue to rise, between one and three percent annually for the next three years.

“We have to be willing to change what used to work. Because although it may have worked in the past, it was never sustainable.”

That seems doable, right? If we can grow by 5.9 percent—our high between 2011 and 2015—surely, we can manage a percent or two. But we have to be willing to change what used to work. Because although it may have worked in the past, it was never sustainable. We must find new tactics, set new expectations and rephrase our recruiting message because times have changed. The “You, too, can have the house, the boat, and retire a millionaire in five years!” hard sell our industry has been known for has done us more harm than good. “The appeal to greed is repugnant,” said LifeVantage President and CEO Darren Jensen at DSA’s 2018 Fall Conference. “We keep going back to that well time and time again, and we need to shift away from it.”

Putting Field Leaders Back To Work

The lure of network marketing was this grandiose plan to work hard for a few years until the big money rolls in and then coast on the residual income. Direct selling companies have themselves to blame since they have traditionally organized their compensation plans to reward these top earners to coast on the work their downline does. It’s time to start rewarding activity that directly brings in new customers and representatives. This strategy not only will energize your ground-level representatives, it should motivate those veteran team members to re-engage in business building.

There are examples of this priority shift all over the channel, notably what happened with AdvoCare earlier this year. In May, the Plano, Texas-based company announced it would abandon the multilevel marketing model, no longer paying distributors on the sales of the salespeople in their downlines, but paying only on sales to retail customers. “Over the years, we have made many changes to the AdvoCare policies as the regulatory environment has shifted,” said AdvoCare Chief Executive Officer Patrick Wright in a statement. “Based on recent discussions [with the Federal Trade Commission], it became clear that this change is the only viable option.”

Other companies are still offering tiered compensation plans, but those plans are getting flatter and easier to understand.

“The more our industry focuses on being customer-centric—the more our business will work in the future.” —Gordon Hester, direct selling analyst

The compensation plan at Salt Lake City, Utah-based Perfectly Posh pays Posh influencers commission on their own sales and a maximum 15 percent commission on the sales of influencers on just two additional levels, or “spheres.” Said Perfectly Posh CEO Ann Dalton in May, “Our new Influencer Pay Plan transitions away from the more typical pyramid pay structure in direct sales, which is neither simple nor transparent. We’ve taken a modern approach to compensation, ditching the complex and often confusing steps it takes to build a successful business.”

Brand ambassadors for Provo, Utah-based Nu Skin can earn same-day sharing bonuses when registered retail customers buy directly from Nu Skin or through the company’s mobile app, the Velocity pay plan. “When we looked at the desires and the needs of [our sales force], we found there was a fairly large group of people building a Nu Skin business because they needed income today—not six weeks or even a week from now,” says Nu Skin President Ryan Napierski.

recruiting messageCompanies with comp plans similar to those at Perfectly Posh and Nu Skin understand that customer acquisition and increasing retail sales have to be their main goals. The bottom line is that most people who come to our doors are just looking for premium products at a fair price. They’re not interested in selling it. Lehi, Utah-based Xyngular puts front and center on its comp plan description that only 20 percent of its members are business builders. When we recognize and respect customers’ motivations, they’re more likely to become repeat customers because they don’t feel pressured to become anything else.

“The more our industry focuses on being customercentric— the more our business will work in the future,” said direct selling analyst Gordon Hester at DSA’s recent annual meeting. “That’s what the data is saying.” The data he’s referring to includes a 48 percent growth in preferred customers in 2018. Preferred customers purchase at a discount, often as a perk of signing up for automatic repeat shipments.

“As the strength of the customer base—what we call ‘customer density’—grows, then all of a sudden, everything around it grows,” Hester continued. “We’re going to see a longer customer lifetime value and longer customer lifetime stay, and we’re going to see distributors staying longer and engaging at higher levels.”

A New Reality

Engaged, loyal distributors take time to cultivate—and it’s more challenging now that direct selling no longer dominates the work-for-yourself market. According to Statista, 57.3 million people are earning money from some kind of gig economy job—Uber driving, Airbnb renting, etc. This likely includes the 6.2 million direct selling business builders, but it also includes 51 million others who aren’t working in our channel. Why do so many people choose these other opportunities?

recruiting messageExperts say it’s because gig companies not only offer the work flexibility and autonomy that direct selling used to own, but they have set new side hustle standards. Gig work often

  • has low or no startup costs;
  • pays instantly (sometimes up front); and
  • provides customer leads—no sales experience required.

Gigs have put in stark relief the difference between wanting to earn extra money and wanting to be an entrepreneur. The two can be mutually exclusive, says Brett Duncan of Strategic Choice Partners.

“While direct selling companies keep promoting ‘business opportunities,’ the Gig Economy keeps showing us just how many people aren’t interested in that,” Duncan wrote recently. “ In fact, it may actually turn them off. Making an extra $300 a month isn’t typically considered ‘a business’ by a normal person. Sure, it technically is a business, but that’s not how most people think about it. So why do we keep pushing it?”

“The appeal to greed is repugnant. We keep going back to that well time and time again, and we need to shift away from it.” —Darren Jensen, Life Vantage President and CEO

Recruiting in our industry has no choice but to stop pushing against the expectations and motivations these gig opportunities have revealed. Yes, there are people who have entrepreneurial skill and drive and who see direct selling as the perfect way to achieve their dreams of business ownership. Most people pick up side work to make ends meet more easily and are bringing in less than $50,000 a year with their gig—only 11 percent are clearing six figures, according to Statista data. Even among direct sellers, only 16 percent of them are working full time (30 or more hours per week), according to the latest DSA’s Growth & Outlook Survey. That suggests that the majority are putting in part-time work because they’re looking for part-time income.

Direct selling companies need to develop recruiting messages and strategies that meet prospective distributors where they are and likely will be comfortable staying. If we don’t, we’ll become irrelevant, says LifeVantage’s Jensen. “We need to recognize we are in a battle of the side hustle.”

We’ve gathered some best practices for winning in this side-money, customer-driven era:

  1. Set honest, realistic expectations. Tell prospective business builders what most distributors actually earn and what it takes to achieve and sustain that level. Xyngular’s comp plan states clearly that nearly 80 percent of its distributors earn $67 a month.
  2. Offer quick payments. Instant commissions are one of the biggest trends in our space. Airbnb hosts get paid before their guest even arrives. So, we have to  get faster. Perfectly Posh pays in less than five minutes from the time of sale, at no additional cost.
  3. Provide complete, accessible information about your opportunity. Make it easy for potential distributors to find your compensation plan and startup requirements on your website.
  4. Watch your language. Reinforce the separation between customers and distributors at every stage. At Xyngular, for example, distributors enroll but customers check out, Jensen says. If a customer has to click “enroll,” there’s an implication that she is getting in deeper than she wants and she may bail on the purchase.
  5. Emphasize product and experience sharing. Potential customers and distributors are more likely to respond positively to authentic content from satisfied product users.

Compliance Matters

Class action lawsuits across all industries are costing companies more money and time than ever.

According to the 2019 Carlton Fields Class Action Survey, the number of companies that reported facing class actions in 2018 dropped slightly to 54 percent, but the average number of matters per company increased from 6.3 in 2017 to 7.8 in 2018. And class action spending increased for a fourth consecutive year, to $2.46 billion in 2018, accounting for 11.1 percent of all litigation spending in the United States. The companies surveyed said most class action lawsuits brought against them last year alleged either consumer fraud or a labor and employment violation.

“Recruiting in our industry has no choice but to stop pushing against the expectations and motivations these gig opportunities have revealed.”

We don’t have class action lawsuit volume for our industry, but the general sense is that we’re feeling the pinch as much as or maybe more than other channels. “In my experience, we’re seeing more and more direct selling companies targeted by class-action lawsuits due to product and earnings claims,” says Crayton Webb, owner and CEO of Sunwest Communications, a Dallas-based public relations firm.

Most of these claims come, though, from a lack of understanding, training and awareness—and while distributors have a responsibility to represent our companies and products truthfully, it’s incumbent on our industry and individual companies to continually educate our field teams. We have to tell them often what they can and can’t say and then monitor our marketplace for statements and activity that come dangerously close to or go over the line.

Do The Right Thing

Amazon and other e-commerce players have rewritten the retail rules. The gig economy has rewritten the work-for- yourself and extra income rules. And regulators are watching us more closely than ever to make sure we stick to the ethical and legal rules—rules, by the way, that we should follow even when no one is watching. We have a choice to make—A) evolve and thrive or B) cover our ears and eyes and hope no one notices if we do business as usual. The thing is, though, A is really the only choice. Because “as usual” will put us out of business.

Sampling A Competitive Advantage

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While direct sellers have long known the value of try before you buy, technology is creating opportunities to maximize results.

In January, news outlets reported that Amazon was quietly piloting a new ad strategy: free samples based on shoppers’ online activity. The pilot is separate from the Prime Sample Program, a paid subscription service available to Amazon customers.

Let’s say, for example, you’ve been browsing coffee brands on the site and maybe even have a bag or two sitting in your shopping cart for later. Then lo and behold, a surprise shows up in your mailbox or doorstep one day: a coffee sample. Like many other retailers, Amazon understands that these days, customers want to try before they buy. And using the enviable data to which they are privy, they’re taking a targeted (albeit a tad creepy) approach.

The power of sampling, of course, is something direct sellers have known for decades. Samplers in a starter kit can help jumpstart a new distributor’s business or, when purchased by an existing distributor, provide a tool for attracting prospective customers or introducing longtime customers to new products.

Along with a highly personalized customer experience, it’s one of the competitive advantages our industry has had over the retail giants. Given that Amazon’s sampling strategy is based on a treasure trove of customer data, though, this pilot program has thrown up a red flag for some skeptics who have privacy concerns. Even with a sampling program, retailers remain a largely faceless entity. While they can offer up data-driven cross-selling opportunities and product recommendations, they can’t deliver a dedicated salesperson—a welcome change in our digitally-driven society—who knows the product line intimately, can answer any question you may have and who often establishes a relationship with you beyond the sale. Sampling takes the prospective or existing customer’s experience to the next level.

How often does a sample result in a sale? While we don’t have statistics that are specific to direct selling, EventTrack 2018, a report issued jointly by EventMarketer and Mosaic found that across the board among all industries, “the primary purchase decision factor by far is getting a sample or seeing product demonstration, according to nearly half of consumers [47 percent].”

“Sampling is even more effective in an event setting, like a home party or gathering where social influence can help move someone,” says Senior Vice President of SUCCESS Partners Noah Westerlund. “No one wants to miss out. Many of the products in direct selling have advantages that don’t come through via packaging, and being able to not only sample but educate the consumer to the benefits is one of the big advantages of direct selling,”

Technology Expands Reach, Quantifies Results, and More

Emphasizing our foundation of personalized service, though, doesn’t mean to imply that direct sellers aren’t using technology to strengthen their sampling strategies. The reality is quite the contrary. “The execution has been sped up significantly by technology, and the reach has been expanded,” Westerlund adds. Direct selling representatives, then, are no longer limited to an in-person meeting to offer or deliver product samples. However, a representative’s best chance for building a long-term customer relationship will come from incorporating more personal touchpoints with the convenience of technology, whether that consists of a call, a text, a Google Hangout, face-to-face visit or some combination of the above.

Where technology is having perhaps its biggest influence is around tracking; direct selling companies are increasingly relying on metrics to analyze the success of their sampling efforts. Instead of waiting until the conclusion of a sampling initiative to discover an element that needed improvement, direct selling companies now are able to examine their progress at every stage, making tweaks on the spot. “If they’re using an automated system to send the samples, like an app or an online portal, then it’s not difficult to track the close rate of those sampled,” Westerlund says. “It’s a lot more difficult to track when it’s one on one, at least from a micro level. On a macro level, is the business experiencing lift or not? Right now, I’d say a lot of companies are trending towards making sure they implement a sampling program and making it simple and accessible. Technology is driving these programs as it allows for scale, tracking and for quick adjustments to programs.”

“Many of the products in direct selling have advantages that don’t come through via packaging, and being able to not only sample but educate the consumer to the benefits is one of the big advantages of direct selling.” —Noah Westerlund, Senior Vice President, Success Partners

For example, the Mobile Office by SUCCESS (mOS) app, introduced by SUCCESS Partners in summer 2018, has provided distributors the ability to fulfill sampling requests from their mobile devices. The idea is to empower the distributor to work her entire business full circle – sharing, sampling, follow-up, selling, recruiting and onboarding – all from her smartphone or tablet. mOS supports multiple payment modes, giving distributors the option to send samples to potential customers at no charge, or choose the option to charge for the sample only or shipping only. The app also enables distributors to offer samples to prospects overseas, effectively eliminating one of the traditional barriers to building a global independent business. From the company side, while sampling “sounds simple, the nuances can get complicated,” Westerlund says. “Is it a credit-based system or pay as you go? Who is doing the fulfillment? What about cross borders and exchange rates? There are a lot of questions that need to be answered on the back end to make it simple for your users on the front end.”

Best Practices

That simplicity is everything, by the way. The vast majority of sampling is initiated by new distributors and/or lower ranks, simply by virtue of the fact that they comprise one of the largest segments, if not the largest segment, of any direct selling company’s independent sales force. Keeping your initiatives straightforward and affordable, repeatedly training your distributors to use sampling effectively, and providing them the tools to follow up with prospects all will increase the odds of their success. The most common mistake by distributors when it comes to sampling is neglecting to follow up with prospects, and on the company side, it’s the failure to train and train often; “you need to make it core to your culture,” Westerlund says.

Another point worth considering for companies and distributors alike is that sampling isn’t just about the results the product delivers. Results are important, no question. However, the experience that sample delivers may be even more consequential. Companies generally choose which product to offer as samplers based on whether they deliver immediate gratification—results consumers notice on the spot. But how does the product look on the table? How does it feel in the hand or on the face? How did it taste? Is it a product easy enough to use that the customer could see herself using it on a daily basis? Does it work as a stand-alone product, or will she need to purchase additional products to enjoy the full experience, so to speak? If she needs to purchase additional products for best results, how will the prospective customer interpret that caveat?

Whatever you can do to maximize the aesthetics of the customer’s experience—and simplify the delivery—will likely enhance her perceived results. Direct selling companies must determine how to train distributors to harness that customer experience, turn it into a commitment to try to the product for 30 days and, ultimately, create a long-term customer and brand advocate.

THE PSYCHOLOGY OF RECIPROCITY

Should direct sellers ever charge customers for samples?

Reciprocity refers to the old “You scratch my back, I’ll scratch yours” adage.

Although it can play a significant role in any distributor-prospect relationship, it can operate in the customer’s subconscious. It works like this: You offer the prospect a free product sample, and the customer is then more likely to feel obligated to purchase something from you. She may not make a purchase on the spot, but if she decides to do so later, she’s likely to remember your generous gift and make that purchase from you. That doesn’t mean that we should be training distributors to have an agenda with their prospects. The most effective strategy for landing a sale remains the fine art of listening to the prospective customer’s needs, empathizing with her pain points and offering her the opportunity to try a product that could provide her a solution.

Should distributors charge customers for samplers? “This is a tough one, as there are so many factors to consider,” says Senior Vice President of SUCCESS Partners Noah Westerlund. “In general, I don’t think they should for traditional samples, but remember—there’s a difference between sample and trials. You want to create a program that doesn’t allow people to take advantage of samples for free long-term supplies. Remember the idea of reciprocity only happens if you give them something. If you charge for samples that idea goes out the window.”