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Thinking of Outsourcing?

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If, and when, to outsource your distribution, warehousing, and fulfillment services.

The term third-party logistics or “3PL” has become antiquated as it conjures up a siloed client/vendor arrangement. Being partners foster more collaborative strategies, and can yield benefits for your business and your customers, over and above the pure play of outsourcing your supply chain.

The prevailing mindset seems to be that you use a 3PL to outsource for fulfillment when you’re a small company, and then as you grow you try to doing it yourself, which usually entails buying or leasing a warehouse. Whatever your decision, it should always revolve around what is right for your customers.

Small vs. Large

First off, smaller companies should rethink using a 3PL for all their fulfillment services. If you’re really small, we advise you to handle the orders yourself and figure out what your customers want by using the easily accessible feedback that presents itself with the lower number of customers you have at that stage of your growth. On a per-order basis, the cost to do a few dozen orders a month with a 3PL is much, much higher than the cost to do it with thousands of orders a month.

The mistake of outsourcing can be detrimental to many promising smaller businesses due to the higher costs involved and/or the dissatisfaction of customers due to the commoditization of a once personal, high-touch service. When you get to be a mid-size company there are suddenly a lot of reasons you may want to outsource. For instance, you don’t want to tie up your hard-earned capital in warehouse space—the opportunity cost of that money is just too much. It can have a much greater impact when used to bolster your marketing, workforce, or your core competency. In other words, outsourcing your fulfillment when you have a small operation, with a relatively smaller number of products and customers can be a bad choice. The opposite being true as you grow into a larger business. However, many growing, smaller businesses tend to think larger ones do everything in-house and that must be how they grew. This is simply not the case.

/ Start With Strategy

Like with other parts of your business that you oversee, start with strategy. Who do you want to be when you grow up? How do you want to be seen by your customers? How do you intend to brand yourself successfully as a unique lifestyle brand with highly customized experiences for no-degree-of-separation customers? Are you going to be more of a mass marketer who only needs a relatively generic customer experience that gives the most customers a best-cost option? These are totally different animals. It can be great to use a 3PL in the latter scenario, but it’s not always the right decision in the former. A 3PL may not put the same care into preparing orders that you would if you were doing it yourself. If you do find a 3PL that can offer that level of customization, it may prove to be a prohibitively expensive proposition. Who you want to be, and how you want to get there, needs an understanding that you can’t have everything, or be all things to all customers.

/ Make Friends With Compromise

Logistics requires it. But which compromises are going to work for you and your customers? For instance, will you be more economical or more personal and customized? You need to pick one. And you can’t get that answer without asking that original fundamental strategic question. If and when you do decide to outsource, make sure you pick a partner who can help you make the correct decisions around carriers, warehousing, least-cost routing software, customer experience and so forth. One that can help your business go to market the right way, for you and your customers. There are lots of variables—an almost infinite number— at play in fulfillment, and it’s a tough equation to solve internally for any company whose value and core competency does not revolve around fulfillment.

/ Don’t Step Over A Dollar To Pick Up A Dime

Making what seems like a smart decision in one area of your fulfillment may not turn out to be a moneysaving strategy after all. Playing with any metric can have dramatic negative consequences elsewhere in the supply chain, which can wreak havoc on customer relationships. It needs to be looked at holistically, by experienced people with complex algorithm software that take into account the whole picture. Paying those types of people to help you can actually add up to dramatically cheaper, faster and more accurate fulfillment than trying to do it yourself.

/ Don’t Fall Victim To Your Own Success

This is especially true when you’re trying to ramp up your supply chain from a garage-sized operation to a real ecommerce business, with a lot more customers and moving parts to consider. Problems in other areas of business growth pale in comparison to those a growing business needs to solve in its supply chain. Getting it wrong, particularly with small parcel strategies, can be a business-ending mistake. Knowing the answers to questions that you don’t know to ask is impossible. Find a partner you can trust, and use their knowledge and economies of scale—that is their core business, after all. You’re much better off focusing on your business and the needs of your customer base.

/ Keep Your Promises

It doesn’t matter how good your product is or how large you have grown your customer base if you can’t fulfill in the timeframe and with the accuracy your new customers expect. You are likely to lose those customers and any future ones you aspire to have. Not to mention what it will do to your reputation. Thanks to social media, we now live in an opinionsharing economy. Customer word-of-mouth trumps everything else in your marketing arsenal.

/ Growth Can Be Rapid. How Quickly Can You Scale?

It’s all about how you deal with sudden, unexpected traction in the market for your products. Your manufacturing may have the capacity; you may have all the right people working for you and your business may well be firing on all cylinders. But frequently those things aren’t what can harm your business. They are not the things your customers see or care about. They care about getting the right things they ordered, in the timeframe you promised you would deliver them. During explosive order growth and seasonal peaks, things like accuracy and speed can go by the wayside. It’s all about finding a trusted partner who can handle your market’s volatility, and satisfy your most important asset—your customers—without any major hiccups.

The Short Answer?

When you’re small enough to have an almost personal relationship with customers, handle your fulfillment personally. As you ramp up your business, you should consider outsourcing to a good 3PL. The right time to outsource will present itself with the following symptoms:

  • Fulfilling orders is requiring you to take your eye off the ball that made you successful in the first place— you’re spending more time worrying about fulfillment than you are your real business.
  • You’re getting negative feedback from your customers regarding delivery times and/or order accuracy.
  • The costs of getting your products into your customers’ hands seem to be spiraling out of control.

Finding the right 3PL won’t just reduce costs and increase efficiency. The promises you can now feel comfortable giving to your customers, as well as the increased satisfaction that results, will give you a serious competitive advantage in your space.

Casey Adams—  Is the president of visible supply chain management, one of the fastest-growing supply-chain management companies in the US.

Is Your Field Using a Home Business Virtual Assistant?

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Alexa can update Ambit Energy consultants on their current customer count and more about their business.

Voice-activated virtual assistants aren’t just for playing your favorite music or reminding you to pick up bananas at the grocery store. They also can help home business owners run their business. Amazon’s Echo devices are still king of the virtual assistant category. According to a 2018 Forbes article, more than 50 million households had installed an Amazon Echo or Google Home device, with Amazon owning a little less than 70 percent of the total market. Apple’s HomePod also had a small but growing share. Alexa, Amazon’s virtual assistant software, utilizes “skills” which essentially are apps and tools that help users organize their day, listen to customized news reports, set reminders, and a whole lot more. Alexa is quickly becoming a powerful business tool, and Amazon.com even created an Alexa for Business section to educate people on how devices can be used in office or home business settings.

From Home Now To Business

“Just like Alexa is making smart home experiences easier, the same is possible in the workplace with voice controls,” said Collin Davis, Amazon’s General Manager for Alexa for Business. “Our vision is to enable a world where Alexa is always available as you move throughout your day in order to be more productive.” This is a great opportunity for direct sales companies to provide a customized tool for customers and distributors. As companies continue to try to stay on top of changing technology, these devices also help increase interaction and brand awareness. They potentially can help customers place or adjust orders, and help distributors stay on top of their business.

‘The Spark’ Alexa Skill From Ambit

Ambit Energy, which serves more than 1 million customers, launched an Alexa skill for customers (The Spark) and another for its field of independent consultants (PowerZone) last fall. Customers and consultants link their online Ambit Energy accounts with the skill on their Alexa device (Echo or Echo Dot). Customers then simply use the voice command, “Alexa, ask The Spark…” followed by a specific topic. Customers, for example, can ask how to move their service to another location, their current electricity usage, billing options, their current energy plan, and even get information on the Ambit Cares charity. Customers can even use the skill to call customer support. Consultants simply say “Alexa, ask PowerZone…” to enable the skill. Alexa can update consultants on their current customer count, the requirements they need to promote to the next level, and more about their business. Ambit says that more updates and customizations are in the works for the Alexa skills.

Get More Customers & Distributors On Base

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Does your compensation plan reward the right behaviors?

IF YOU’VE ever seen the 2011 film Moneyball, you can recall the premise: Billy Beane, general manager of the Oakland A’s (portrayed by actor Brad Pitt), sets out to rebuild his failing team. His strategy: turning to hard numbers to identify the diamonds in the rough who will become his new players. With the help of a number-cruncher fresh out of the Ivy League, Beane assembles a team that, ultimately, starts giving the competition a run for their money. Baseball is all about tradition, so relying on big data was a marked departure  from norms in the sport. Specifically, Beane andhis young sidekick were using statistical analysis to determine which players were on base most often.

Mark Rawlins, Founder and CEO of InfoTrax has found important parallels between this famous baseball movie and direct selling, specifically in the area of sales force compensation. “Direct sales companies don’t need to be focused on finding home run hitters,” he says. “Rather, they should be focused on getting more players (distributors and customers, that is) on base. This is rather intuitive: The more people you can get on base, the greater the odds of a win.”

Throughout our industry’s history, direct selling companies have invested countless hours analyzing how to best compensate their respective independent sales force members. The objective has been to offer rich and competitive compensation plans that attract and retain distributors–without jeopardizing corporate profitability, of course. That’s a rather shortsighted view, however. If the goal is to get more people on base as Rawlins infers, compensation plans should instead be aimed at driving the kind of behaviors that lead to success. In other words, we’ve got to examine how we’re rewarding distributors, moving beyond the simple analysis of how much we’re rewarding them.

A little myth-busting may be in order before we proceed. There is no perfect compensation plan; nor is there a one-size-fits-all solution for every company. Rawlins has spent much of his career managing and advising direct sales companies on this very topic. Rawlins will be the first to tell you that what works for one company may not work for another. “Companies are in different growth phases, sell different products, have different selling methods and different cultures, values and visions–and that’s just for starters,” he says. Distributors start a direct sales business for a multitude of reasons, not all of them involving money. And they’re motivated by different incentives Rawlins says.

“If you’re giving some thought to tweaking your compensation plan, and/or if you’re questioning if you’re adequately rewarding the behaviors that will bring more prospects to your business opportunity and keep them there, your value proposition is a good place to start.”

“Direct sales companies don’t need to be focused on finding home run hitters. Rather, they should be focused on getting more distributors and customers on base. The more people you can get on base, the greater the odds of a win.”
—Mark Rawlins, Founder & CEO, InfoTrax

It All Starts With Two Questions

Dan Jensen, founder of Dan Jensen Consulting, has counseled direct sales companies on compensation, incentive and business plans, along with recognition strategy, technology and business best practices. Any company grappling with how to get more people on base, he says, would be well served to return to the two universal questions every potential independent distributor considers. First, is the opportunity worth it? And, second, can I do it? Direct selling companies are usually good at answering the first question through rewards, recognition and motivation. The second question has to do with skill and competency. Any prospect is determining if she’s competent in such skills as selling products, talking to people about a business opportunity, building a team and inspiring others. “Companies have to “balance the motivational part of the business with the competency part of the business,” says Jensen. “Failure to do both will most certainly result in stagnation or worse.”

The First 90 Days

“No compensation plan by itself is responsible for the success of any company,” Jensen says. “A compensation plan by itself, without competency, won’t work.” Therefore, training has to align with the rewards and recognition system. And the first 90 days of a distributor’s business are key. It’s during that period that “you’re looking to teach people to hit singles so eventually they hit doubles and triples,” Jensen says. “You can score lots of home runs that way.”

To help new business owners gain traction in those first 90 days, Jensen recommends three rank advances within three months. That means that the design of your plan must create the first three ranks with a “fairly low bar of performance. You hope they recruit one or two people in the first 90 days and find customers, and the recognition of the rank advancement keeps them in the game and wanting more.” Compensation plans that work well and support growth often include narrow gaps between titles. “You don’t want to have to jump over the Grand Canyon to get to the next level.” And, of course, the rewards should be incremental with each new title. A new distributor should be able to look to the next level and believe that it’s not only attainable but that it’s worth it. Jensen adds that it’s entirely possible for direct selling companies to get 20 percent of new recruits doing a fast start in the first 90 days – if their systems are aligned.

Even when we remove those who start a direct selling business solely for the discount, within any company’s sales force is a large percentage of new distributors who don’t recruit anyone within their first 90 days. Companies who can whittle that percentage down will start hitting more homers. That “analysis paralysis” likely is due to lack of confidence. Many new distributors start a direct sales business “like they’re taking a test drive,” Jensen says. Therefore, it’s vital for them to receive not just the rewards and recognition, but also the training so that the answers to “Can I do it” and “Is it worth it?” are both a resounding yes.

“ No compensation plan by itself is responsible for the success of any company. A compensation plan by itself, without competency, won’t work.” —Dan Jensen,  Founder and CEO , Dan Jensen Consulting

The Shift To A New Reality

Direct selling companies are experimenting with various tweaks to their compensation plans in order to reflect a new reality: the hybridization between online companies with affiliate programs and direct selling, says Alan Luce, senior managing principal at Strategic Choice Partners, a consulting firm specializing in direct sales business development. Today, he says, more distributors are interested in running their business online for part-time income than running their business face to face or one-to many in a party setting. While direct selling has always been built on part-time sellers, “today it’s more built on part-time sellers than ever before.”

There’s no one formula companies have settled on to accommodate this shift, but in general, successful direct sellers are designing flatter compensation plans of two to three levels deep. “With more part-time sellers than ever, companies are increasingly introducing referral based customer loyalty programs,” says Kevin Crandall, Vice President of Sales, Shaklee. “The idea is to create raving fans and then gauge their interest in the opportunity.”

“With more part time sellers than ever, companies are increasingly introducing referral based customer loyalty program. The idea is to create raving fans and then gauge their interest in the opportunity.” —Kevin Crandall, Vice President of Sales, Shaklee

With this shift to online, part-time direct sales, it’s quite possible that a distributor never leaves her house to conduct her business. She may have a strong customer base, including several in the preferred customer program who receive rewards from bringing her referrals. She might do an occasional one-to-one sale online and hold a Facebook party every now and then. Accordingly, “because you have a flatter, more part-time first level of seller, that means you have to change the qualifications for business leaders,” Luce says. For example, let’s say your minimum production for becoming a business leader is $3,000 in production. You might have two customers or 10. As long as you reach $3,000, you’re a business leader.

“A couple of other tactics direct sellers can use to attract people is via a sampling program to build distributor confidence through small wins, which can help companies identify when a distributor is becoming disengaged and preparing to leave,” says Crandall.

Other Considerations

Create the “golden handcuffs.” When direct sellers can generate predictable and reliable income of about $300 to $400 per month— enough to make a car payment or a sizeable chunk of a payment—“then you create a dependency income, and that dependency causes retention,” Jensen says. “You can’t keep people with Starbucks money, but with Disneyland money, you can.”

New companies need time to determine if their compensation plans are working, Rawlins says. The first two to five years “says nothing about how effective your comp plan actually is.” Dream builders may be telling prospects, “ ‘If you do this you’ll make $500 a month or $5,000 a month,’ and there’s no evidence one way or another. It takes time or people who believe to realize it’s not true if it’s not true, and then it takes time for that to gain critical mass. At some point, it doesn’t work anymore. One of worst traps I see companies get themselves into is they start out and grow like wildfire. They don’t realize that you’re running on pure adrenaline
at that point.”

As direct selling companies continue to grow and evolve and the industry becomes more competitive, organizations are left with the challenge of how to deliver the most attractive compensation plan for both distributors and the corporate bottom line. The best plan is the one that reflects who you are and where you want to be as an organization—and one that incentivizes your distributors to achieve long-term, sustainable success with integrity.

Key Performances Inidicators

IF THE GOAL IS to get more people on base, what should your Key Performance Indicators, or KPIs, be? In other words, what are the measures that will tell you if you’re meeting your objectives (or not)?

1. Ensuring That 50 Percent Or More Of Your Distributors Are Achieving Quick Start

is one of the most critical KPIs to watch, Luce says. “Study after study has shown that people who achieve success during their first 30 days stay in business twice as long and sell four times as much over the course of their business.”

2. Are Your Sales Force Members Recruiting At Least 2 Percent Each Month?

For example, if your sales force is comprised of 100,000 members in a given month, you should be seeing approximately 2,000 new recruits that month. “If you drop below that, you’ll start to contract as a company,” Rawlins says.

3. Take A Look At Your Salespeople—

those Rawlins defines as earning between $300 and $500 per month, mostly from their recruiting efforts. Do they stay, and if so, how long do they stay? If you have rapid turnover in this group, it’s difficult to maintain your growth as a company. “If for $300 to $500 they’re not staying,” Rawlins says, “it means they’re spending too many hours to make that $300 to $500.” He refers to this as the “McDonald’s rule.” If a distributor is spending more time to make $300 to $500 than she would to work at McDonald’s part-time for the same money, she’s not likely to remain a distributor.

4. Jensen Recommends A Minimum Target Dollar-per-Hour Propositions Of Two and a Half To Three Times The Minimum Wage.

So if the minimum wage is $10 an hour, a direct sales business becomes an attractive proposition at a minimum $25 to $30 an hour. Why does our industry have to prove itself at a higher hourly rate? A typical part-time job offers structure, a schedule, a defined environment and, most crucial, predictable income. A direct selling business offers tremendous flexibility, but the income is entirely self-directed and not always predictable depending upon one’s success in any given month. Therefore, “we have to be significantly more than minimum wage to win that battle.” Jensen adds that there’s an “exponential” drop in sales force retention once you dip below the $25 to $30 threshold and a spike when it meets or exceeds $50 per hour.

5. How Many Months Do Customers Stay Active, On Average?

For every company, it’s slightly different, depending on the products or services your representatives sell.

6. If Person A and Person B In Your Sales Force Each Recruit 10 People, How Many Of Those People Are Still Active One Year Later?

If the numbers for Person A and Person B are significantly different, “work yourself upline until you find out the cause. Is it just these two people, or this organization, or this dream builder? Dream builders teach their downlines different strategies for signing people up, and you want to know which ones are effective and which aren’t and where it started,” Rawlins says.

7. Month To Month Change In the Number Of Paid Leaders–

those who not only carry the title but are also paid as leaders. “When that number goes up, sales go up and vice versa,” Luce says. “It’s the canary in the mine.”

8. Number Of New Recruits per Leader Each Month.

If leaders aren’t recruiting on a regular basis to accommodate natural turnover in the business, eventually sales production will drop.

9. Cash To Field.

Former Co-CEO of Primerica John Addison says one of the most important KPIs a company needs to track is the total cash being paid out to the field each month.

7 Types Of Distributors

To Determines what drives behavior, we first have to categorize distributors using some of the data readily available to us. Based on the company’s extensive background in compensation plan design, Rawlins identifies seven primary types of distributors:

Customers: Sometimes dubbed “personal use consultants,” customers sign up to be able to buy products they love at wholesale. They never recruit any team members.

Social Enrollers: These are the same people who grab you at the coffee machine and won’t let you leave until they tell you the entire plot of the movie they saw. But they don’t want the responsibility of being a distributor. Social enrollers, who also enjoy the product discount, can be very effective at driving people to the company. However, they don’t want the blame if they fail.

Emerging Sales Leaders: Quite simply, emerging sales leaders are salespeople who are now teaching others how to be salespeople.

Sales Leaders: These superstars have successfully replicated the process of building salespeople down multiple levels.

Dream Builders: They’ve reached the top-most levels of your sales organization and possess the ability to motivate and inspire from the stage.

Lottery Winners: Lottery winners signed up one or two team members who became very successful. Due to the manner in which their compensation plan is structured, they’re compensated handsomely and can be quite opinionated about whether the organization should make any changes to the plan.

Retirees: This group has achieved the dream of residual income.

Rawlins has seen companies pay as much as 25 percent or more of their total compensation to lottery winners and retirees. But who’s really moving the needle? It’s the emerging sales leaders, sales leaders and dream builders.

Fact or Fiction? Let’s Set the Record Straight

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Most of us know the game “Telephone” where one person whispers a statement to their neighbor, and that person turns to their neighbor and repeats the statement as they heard it. The further down the line, the more the statement is misinterpreted and altered. In today’s fast-paced digital environment, unchecked or even false information can be spread in an instant, making it difficult to distinguish between fact and fiction.

Like many established industries, we’ve dealt with misinformed statements and flat-out fiction throughout the history of the direct selling channel. Recently, news reports proliferated inaccurate direct selling earnings information, erroneously inferring that specific earnings data were published by the Federal Trade Commission (FTC). In fact, the FTC never published a report of this nature and there are no government reports of any sort which address the issue of how much money direct sellers across the business channel earn. Adding to the misinformation, some reporters have referenced an FTC website link to a public comment from an outspoken and opinionated critic of direct selling.

FACTS AND FINDINGS

DSA proactively educates reporters, writes editorials and opinion letters, and even requests retractions or apologies. We’ve also provided direct selling facts and pointed news outlets to thirdparty research and academics, including:

  • According to DSA’s 2018 National Salesforce Study, 80 percent of respondents rate their experience in direct selling as good, very good, or excellent.
  • DSA’s 2018 National Salesforce Study shows that 90 percent of people involved in direct selling work part-time (fewer than 30 hours per week) with more than 50 percent working fewer than 10 hours per week.
  • Research conducted by DSEF Fellow, Dr. Anne Coughlan, Polk Brothers Chair in Retailing, Professor of Marketing, Kellogg School of Management, Northwestern University discusses her independent research on the individual motivations of direct sellers who become involved in the direct selling industry.

TURNING A NEGATIVE INTO A POSITIVE

Pick up the printed issue in which this article is found.

When encountering inaccurate information, we can change the conversation to a positive one by emphasizing the proactive steps we are taking to support and protect U.S. consumers. In many cases, we highlight the DSA Code of Ethics requiring that accurate and truthful earnings representations be shared with all prospective sales people. In addition, we point to the steps we are taking to establish a self-regulatory program. The Direct Selling Self-Regulatory Council (DSSRC) will be administered by the Council of Better Business Bureaus (CBBB) and monitor the entire direct selling marketplace, not just DSA members. This will include websites and social media of direct selling companies and their independent sales forces in the areas of income representations and product claims.

A NEW DSA RESOURCE

Imagine if the more than 18 million people in direct selling and DSA member companies had a go-to source for the latest facts and information to address inaccuracies and, in turn, accurately promote the benefits of direct selling. I’m pleased to tell you that we recently launched, “DSA Fact Check,” a campaign that includes timely questions and answers about our industry, along with
important facts and third-party resources.

When it comes to setting the record straight, we as an industry can be a powerful voice for truth.

Stand Up or Lay Low?

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CEOs mull the merits of political and social activism.

Last fall Nike made big news with a commercial featuring Colin Kaepernick, the first NFL player to kneel during the national anthem before games to protest racial inequality and police brutality. The spot included other athletes who’ve made bold moves for their reasons. So, the overall stand Nike was taking was that it’s important to take a stand, but including Kaepernick sent a strongly implied message.

Days after the 2018 mass shooting at Stoneman Douglas High School in Florida, Bank of America announced it would re-examine its relationship with manufacturers of the style of weapon the shooter used. Bank of America Chief Executive Officer Brian Moynihan was later quoted as saying, “It’s not exactly political activism, but it is action on issues beyond business.”

Socially Conscious While Making Smart Business Decisions

A growing number of corporations and CEOs are at least talking beyond business by going public with their positions on social and political issues, especially issues that seem, more than ever, to be pushing our collective buttons. Two executives we spoke with have varying degrees of comfort with how much to say when they talk. But whether or not they share their opinions, they agree that being socially conscious while still making smart business decisions is critical.

“Regardless of party affiliation, universally we want to be socially responsible,” says Wendy Yurgo, CEO of Las Vegas-based Metrics Global, a supplier company to the direct selling industry.

Jeff Bell, CEO of Ada, Oklahoma-based LegalShield, says the “very nature” of LegalShield’s business makes the company’s positions on many issues clear. “We wish to provide equal access to the liberty, equality, opportunity and justice that every human deserves,” he says. So, the company “strongly advocates” for a range of issues, including responsible gun ownership; freedom of speech; and equality regardless of religion, race, gender, sexual orientation or gender identity. Bell believes that these clear commitments have helped LegalShield set records for membership, commissions and corporate revenue.

CEO Survey Says…

Many CEOs still prefer not to share their views on matters that don’t directly relate to their business. In an Annenberg Center for Public Relations survey 60 percent of CEOs said they’re unlikely to publicly take sides on social issues in the near future. Most said they would stick to messages about their products, services and how they’re different from their competitors.

Speaking up on controversial topics feels inappropriate to Yurgo. “I do not take and have not taken political stances publicly, as a rule,” she says. “My private political positions are not really relevant to my clients.”

“I do not believe that corporations should take political stands. Corporations, by definition, are a collection of individuals who will have their own individual opinions and positions. Each individual should be allowed to express their own position without feeling they are at odds with their employer,” said CEO of Xyngular’s Russell Fletcher. “For this reason, I try very hard to separate my personal political, social, or religious opinions or beliefs from my role as CEO. I want anyone, regardless of whether or not they agree with me politically or socially, to feel welcomed in our corporate culture, and to feel confident and comfortable using our products or engaging with our opportunity. I am personally very politically active, but I do my best to not let that activity reflect for good or evil on my company.”

However, some research finds that consumers and employees want top execs to take sides. Nearly half of Millennials responding to a Harvard Business Review survey said they would feel increased loyalty toward their CEO if he or she took a position on a controversial topic.

Finding the Right Balance

Bell’s perspective on CEO activism has some nuance that might help executives who don’t want to keep their opinions completely to themselves but prefer to err on the apolitical side. “You can advocate for immigration reform without taking a stance on a border wall,” he says. “You can advocate for an end to deadly force during arrests without commenting on a specific circumstance.”

Both Yurgo and Bell say that their overall goal as CEOs is to provide associates and clients with the opportunity to be successful, so minding their own store is vital. “We are blessed with being in the position to serve an incredible industry of amazing entrepreneurs who trust us with their creations,” Yurgo says. “For us, the focus is to serve them so they may thrive.”

Passion for a cause that distracts from smart decisions can compromise that focus; Bell says: “If a company is socially responsible but bankrupts, it is a failure. There is a balance for all companies, and real leadership finds that balance.”

Biz Opp Presentation Trends

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What’s Working, What Isn’t and How Digital Is Changing The Game.

BEFORE SMARTPHONES were in every pocket and tablets became as common as the personal computer, sharing the direct selling opportunity meant hosting an in-person event. Potential customers had to be local or willing to travel, and the main attraction was either a talking head at the front of the room or a recorded presentation listened to on a cassette player or watched on the living room TV and VCR that everyone gathered around.

Back then, customers based their purchasing decisions off what they learned from these talks or recordings, but all of that is ancient network marketing history now. While the inhome party is still effective for companies with tactile products that are dependent on the user experience, like cosmetics or clothing, it now must be coupled with digital events or marketing to compete for scale. For some companies, the cumbersome in-person pitch has become all but extinct.

The Subtle Sales Pitch

When direct selling and in-home parties went hand-in-hand, customers knew a sales pitch was coming. It was scribbled on their desk calendars and planned in advance. Today, the opportunity pitch is often so sleek that potential clients don’t even realize it’s happening.

“A lot of the presenting is done prior to them wanting to or knowing they want to buy a product,” says LifeVantage President and Chief Executive Officer Darren Jensen. “A lot of people begin following you on Facebook or Instagram and become involved in your life. The way [presenting] has changed dramatically is it has moved to the more raw, edgy everyday life. They learn from watching your life on social media.”

Distributors are now micro-influencers who seamlessly share curated content, their daily lives, products and business venture opportunities, without sounding like a commercial that today’s consumer can see from a mile away and intuitively dodge. In fact, today’s direct selling presentations often don’t look like a presentation at all. They can happen when a distributor goes live with a makeup tutorial and chats about how the business behind her favorite skincare products helped her pay off her student loans, or when a mom posts a quick story about her morning routine and includes the new vitamin-infused powder that’s helped her lose weight and–oh, by the way–also earn a few bucks. It’s usually followed up with a quick “DM me if you want to know more.” No high-pressure sales pitch. No information-laden flipchart. Just a trusted connection sharing a product or business they love.

It’s the same word-of-mouth advertising direct selling is known for, but souped-up, shortened to capture attention spans that are used to flipping through dozens of videos and pictures a day, and sandwiched in between updates about family vacations and the hot new sushi bar in town.

“ The way [presenting] has changed dramatically is it has moved to the more raw, edgy everyday life. They learn from watching your life on social media.”
— Darren Jensen, President and CEO, Life Vantage

Casual Presenting Winning The Day

Direct selling companies are learning to sink their teeth into this more casual presenting style by nixing the stuffy board room vibe and opting for entertaining resource videos that distributors can share with their followers. Following in the footsteps of Google and Facebook, direct selling companies like Prüvit, who use animation like a cartoon campfire to explain ketosis, are finding that animated videos can explain complex topics in a lighthearted fashion that connects in a way ordinary presenters can’t.

This casual presenting style only works if a dedicated following of fans or friends are listening, and distributors with LifeVantage have discovered how to leverage social media for this purpose as well. By utilizing the Ad, Tag, Message approach (or ATM), distributors gain access to a massive warm market simply by making friends through social media. By following this ATM method, Jensen says, average-sized teams within his company are bringing in on average 1,500 new customers and distributors a month.

The Magic Blend Of High Touch and High Tech

Direct selling presentations have evolved from live meetings in a living room or rented hotel conference room that were often cost-prohibitive, to links to recorded presentations available on YouTube or a company website that could seem cold. “The advantage of the hotel room was the presenter could tailor the presentation to the audience, take questions and have interactivity,” says SUCCESS Partners Senior Vice President of Business Development Noah Westerlund. “You lost some of that with YouTube and DVDs and left the prospect out there on their own.”

Enter Zoom, an online conferencing app that has become a go-to resource for distributors. The cost to host a conference is negligible and free to join as a guest, but most importantly, it provides the collaborative, live feel that’s often missing in high tech presentations. By facilitating real-time conversations between participants and including them, prospective customers feel like they’re on site even though they may be watching from their car or couch. Facebook Live is another resource trend connecting followers and potential customers. “We’ve embraced the high tech, but sometimes in doing so we forget the high touch,” Westerlund says. “This is a high touch business; it’s a relationship business—it always has been and always will be.”

“We’ve embraced the high tech, but sometimes in doing so we forget the high touch. This is a high touch business; it’s a relationship business–it always has been and
always will be.” — Noah Westerlund, SUCCESS Partners Senior Vice President of Business Development

Meeting People Where They Are At

The in-person meeting hasn’t been ditched altogether, but successful distributors are learning how to enhance that first touch and make it more effective and efficient. With Zoom and other developing platforms like it, teams can build their businesses without requiring more of potential customers than they are willing to give, by meeting people where they’re at and respecting their time, and distributors can achieve a cross country tour that used to require months of planning and execution in a single evening without leaving their desk. Technology can help business builders reach more people and reach them quicker, but the tried and true methods of knowing how to move people to action and connect on an emotional level will always be relevant.

“Who knows what the next presentation software will be, but here’s one thing I do know: one of the dangers of technology is we seem to think it’ll do it for us,” Westerlund says. “Look at how technology can facilitate those relationships but don’t look for technology to replace those relationships.”

Survival Means Simplifying

As Darren Jensen and his LifeVantage team were designing their internal artificial intelligence, they looked at who was doing the lion’s share of recruiting for their company and discovered that those making $350 per month or less accounted for 70 percent of the company’s enrollments, and those making $2,500 or less per month brought in 92 percent of all new enrollments.

The movers and shakers, they found, weren’t the elite high earners; it was the masses of people working it as a side hustle. Making tools—especially mobile presentation tools—that were simple to use became a high priority.

This urgency to simplify is one reinforced by Jensen’s friends in other industries, like leaders at Airbnb, Amazon and SC Johnson, who see direct selling positioning itself as too difficult, with confusing presentation tools and compensation systems that are too complex.

“Sometimes we get so myopic in our own industry,” Jensen says. “Amazon and Airbnb are entrepreneur creators like us. We’ve got to up our game. If we don’t, we may be beat at our own game.”

Sandra Harris Appointed Tupperware Chief Financial Officer

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Tupperware Brands Corporation recently announced the appointment of Cassandra “Sandra” Harris as executive vice president and chief financial officer effective April 1, 2019.

Harris succeeds Michael Poteshman, who recently announced his retirement after a 25-year career with the Company. He will remain until March 31, 2019, and provide consulting services through September 30, 2019, to ensure an orderly transition.

“We are pleased to welcome Sandra to our team,” said Tricia Stitzel, president and chief executive officer. “Sandra brings decades of executive experience, including at a global retail company where she developed and led impactful financial and strategic initiatives for the organization. Sandra’s proven record of transforming companies through implementing successful operational, technology and supply chain changes will be extremely valuable to Tupperware. We look forward to benefitting from her leadership as we continue to take decisive actions to deliver sustainable growth and long-term shareholder value.”

Harris joins Tupperware from VF Corporation, an $11.8 billion global corporation with a diverse portfolio of iconic lifestyle brands, where she held various positions of increasing responsibility, including global vice president and chief information officer. Prior to this role, she served as chief financial officer in the Direct to Consumer and Global Supply Chain divisions, where she was responsible for driving VF Corporation’s strategic and financial imperatives globally and across brands related to direct to consumer, supply chain and shared services. Harris began her career at Deloitte & Touche, LLP.

Nu Skin to Open in Peru

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Nu Skin Enterprises, Inc. recently announced plans to open in Peru, expanding the company’s presence in Latin America.

“Nu Skin’s business in Latin America has seen incredible growth over the past year as our products and business opportunity continue to improve lives throughout the region,” said Tyler Whitehead, West Region president. “Peru is a well-established market for direct selling, and we have seen great anticipation from potential customers and sales leaders there. We are committed to investing in Peru as a new market and are confident in a successful future.”

Nu Skin operations in Peru will begin on March 7, 2019, with a grand opening event in Lima. The company will offer a selection of its most popular personal care products at launch with plans to introduce additional products over the coming months.

“For 35 years, Nu Skin has grown around the world by providing customers innovative products deeply rooted in science and technology and building a strong partnership with our sales leaders to help them succeed with a rewarding business opportunity,” said President Ryan Napierski. “Providing our empowering products and opportunity to the people of Peru is the latest milestone in our growth initiatives and an exciting new chapter of Nu Skin’s global operations.”

Medifast Revenue Up 87% for Q4 2018; Up 66% for Full Year

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Medifast, Inc. (NYSE: MED) reported financial results for the fourth quarter and full year ended December 31, 2018.

For the fourth quarter of 2018, revenue increased 87.0 percent to $145.8 million from revenue of $78.0 million for the fourth quarter last year. OPTAVIA-branded products represented 72 percent of consumable units sold for the fourth quarter of 2018 compared to 51 percent for the fourth quarter of last year. The total number of active earning OPTAVIA Coaches for the fourth quarter of 2018 increased to 24,100, compared to 15,000 for the fourth quarter of 2017. The average revenue per active earning OPTAVIA Coach for the fourth quarter of 2018 increased 26.2 percent to $5,756 compared to $4,562 for the fourth quarter last year.

 “We are very pleased with our strong finish to 2018,” said Dan Chard, Medifast’s chief executive officer. “We reached a significant corporate milestone generating over $500 million in annual revenue and profitability exceeded our expectations. Importantly, we achieved these results while accelerating the level of strategic investment to support our long-term growth plans to build our brand platform and operations as we continue to improve the scalability of our business. As we move forward with our strategic initiatives, both domestically and internationally, we believe we remain well positioned to deliver long-term sustainable growth and value for our shareholders as well as meaningful improvements to the lives of OPTAVIA clients across the country as they learn new healthy habits that make their lives better.”

 For the fiscal year ended December 31, 2018, revenue increased 66.1 percent to $501.0 million compared to revenue of $301.6 million in 2017.

To read the full Medifast financial report, click here.

KEEP Collective Names Jorden Bell New General Manager

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KEEP Collective, sister brand to Stella & Dot, recently announced that Jorden Bell has been named general manager.

“Jorden brings a remarkable eye for product and expansive professional background in merchandising, marketing and leadership,” said Ani Hadjinian, president of Stella & Dot Family of Brands. “Her successful track record of driving high-growth businesses and unique ability to transfer her skills across lifestyle and fashion sectors will be a huge asset to the KEEP Collective brand and our company’s thought leadership.”

Bell brings an expertise in the development of categories, assortments and disruptive marketing strategies that inspire customers and increase new acquisition. Leveraging an early career success in luxury fashion at Saks Fifth Avenue and Bergdorf Goodman, she spent the last eight years at Pottery Barn, driving the expansion of their textile division.

“I am thrilled to be joining the Stella & Dot Family of Brands, especially at such a pivotal time for the company,” said Bell. “I have a strong appreciate for the brand’s mission, selling model and the opportunities that lie ahead for KEEP. I’m excited to partner with Ani and work with the team to shape the future of the brand that keeps the stylists, designers and customers at the core of what we do.”

Jessica Herrin, CEO and founder of Stella & Dot Family of Brands, launched KEEP Collective in 2015. KEEP Collective offers customizable meaning-based accessories and lifestyle products, exclusively sold by KEEP “Designers” (Independent Business Owners) online and at in-home “socials.”

Sinéad Pollock Named Plexus General Manager of Australia

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Plexus Worldwide recently announced the addition of industry leader Sinéad Pollock to its team as the general manager of Australia.

“Sinéad’s proven track record of driving sales and rank advancement through strong field partnerships will serve Plexus well in our expansion into Australia,” said Christopher Pair, president of Operations and International for Plexus. “Her experience in strengthening field relationships, developing rank advancement initiatives and executing growth strategies in the Australian market will assist us greatly as we continue to grow globally.”

As part of the growing international leadership team, Pollock will oversee Plexus’ Australia market expansion.

“Australia is ready to welcome Plexus, and I couldn’t be happier to be joining the Plexus team,” said Pollock. “I look forward to using my expertise in business management, field development, events, strategic planning and execution to lead Plexus’ expansion into Australia.”

Pollock, originally from Ireland, has resided in Australia for the past 19 years. She most recently served as head of sales for Australia, Singapore and New Zealand for another direct selling company. Prior to entering the network marketing industry, she worked in a variety of management roles in hospitality and staffing.

“With a dynamic personality and inspiring leadership skills, Sinéad understands the value of shining a light on others to elevate and develop their strengths and personal development,” said Tarl Robinson, CEO and founder of Plexus. “We are excited to have her as part of the One Plexus team.”

Kannaway Sports Team Welcomes Former NFL Placekicker Mike Hollis

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Medical Marijuana, Inc.  recently welcomed former NFL placekicker Mike Hollis as the newest spokesperson for its subsidiary Kannaway®.

“We are excited to bring Mike Hollis on our team and look forward to seeing him spread awareness on the health benefits of our CBD products,” said Kannaway CEO Blake Schroeder. “We have added Kannaway Premium Hemp Oil to Mike’s morning and nightly routines and are eager for him to share his testimonial with it.”

Hollis spent his nine-year career with the Jacksonville Jaguars, Buffalo Bills and New York Giants from 1995 to 2003.

“I know my position in the NFL wasn’t one where I was getting hit full force every day, but the unending benefits of CBD for discomfort and overall health are what really caught my eye,” said Hollis. “It’s only a matter of time before everyone understands that CBD is not bad, it’s natural and doesn’t have negative side effects.”

Kannaway is the first hemp lifestyle network to legally offer hemp-based botanical CBD wellness products. The Kannaway Sports division aims to spread awareness of the many important benefits CBD offers for professional and amateur athletes, connecting former NFL athletes with the education and products they need to help them live happier, more fulfilling lives.