In tough times, the strong grow stronger.
The organizations that will perform the best through this period and beyond will be those that maintain a strong customer-centric focus while dealing with the complexity, uncertainty and risk that cloud the business landscape. This means knowing the sources of risk and opportunity within the global customer base. It means finding new routes to reaching customers—increasingly, through channels that customers control. And it means focusing less on driving customer transactions for short-term gain, and more on fostering trust-based relationships over the long term,” quoted in Why Customer Centricity Matters, Accenture.
The term “customer-centric” isn’t new. Leaders in marketing and academia have been using it for years—and, long before the global pandemic began, direct selling companies were giving thought to how they could either implement or enhance the customer loyalty programs offered by their independent distributors.
What is new are the unique and expanded opportunities that direct selling companies and their distributors now have to serve customers in ways that meet the challenges of our present times. The ability to serve them without compromising the highly personalized service those customers expect. In so doing, they underscore the adaptability of the direct selling business model while positioning distributors to attract new customers as well as repeat orders from their existing customers. At a time when so many brick-and-mortar retailers are limiting foot traffic or closing their doors altogether, direct selling is poised not only to survive, but also to thrive.
That’s why so many direct selling companies have been giving serious thought to what customer-centric means in 2021.
Just as corporations and organizations among nearly every industry sector have speculated that a remote workplace may be the new normal, direct selling leaders are considering that customer engagements are likely to be more digital in nature, not just until we find a cure or a vaccine for coronavirus, but perhaps indefinitely.
“Certainly, the way we’ve done business in the past will not be how we do business moving forward,” says Sarah Bjorgaard, Regional President of North America for Young Living. “We would be crazy to think that the global pandemic will not shift our model in some capacity permanently.”
A streamlined yet personalized shopping experience is one the consumer is more likely to repeat—especially given the alternative of waiting outside of a retail location in a socially distanced line. From the distributor’s standpoint, repeat sales mean long-term or even lifetime customers—the hallmark of a strong direct selling business. Those loyal customers are not only brand advocates; they’re the distributor’s advocates—and they may become distributors themselves.
Direct Selling News covered the topic of “customer centrism” throughout 2020 and, in the process, we learned a lot about how companies throughout the industry are approaching this opportunity. Based on all of those interviews and interactions, it’s clear to us that the time is now for all direct sellers to explore and understand what customer-centric will mean to our business model and to capitalize on this moment in time to raise the bar on how we attract, serve and ultimately retain customers.
The EVOLUTION OF ‘CUSTOMER-CENTRIC’
Ours is an industry-created with a mission to facilitate personal interactions between distributors and customers. While personalized service and strong customer relationships remain the hallmark of direct sales, the methods distributors use to serve their customers have changed. Originally, distributors purchased products from their companies at wholesale prices, then resold them to customers at a suggested retail price—either in person or via a personal website.
Today, distributors build independent micro-enterprise direct selling businesses by promoting the products and services they represent through personalized, casual and friendly marketing efforts using the most popular social and digital tools supported by an e-commerce platform. The focus is on delivering an experience that transcends the transaction. In fact, the experience may even be more important than the price, even in times of economic uncertainty.
Customer-centrism affects the distributor’s role, as well; in North America, distributors no longer have to carry large inventories because direct selling companies are handling the order processing, fulfillment and payment of commissions—usually within the same week, and soon perhaps even within hours of the transaction. So, while highly personalized customer service remains the cornerstone of direct sales, the industry has been hard at work to raise the bar on convenience factor not only for customers but also for distributors—simultaneously making it easier for customers to buy and reorder our products and lowering the barriers to starting a business for existing and potential distributors.
Being customer-centric involves more than just asking what your customers want. It’s about having the data to back up those assertions, acknowledging when changes to your business model are in order, and then following through on those modifications, even if they involve an element of risk, uncertainty or trial and error. It’s also about embracing the fact that you’re going to have to make periodic tweaks to your system because with customers as well as with technology, change is constant.
“Many of us have been in the industry for 10, 15, 20-plus years. It’s imperative to realize that change is critical for growth,” says Bjorgaard. “That means that the way we used to do business to achieve our goals is not the way we will do business tomorrow to achieve our goals. The industry is changing, consumers expect more in order to shop with us, and building a community of followers connected to a larger purpose is essential. Leaders of tomorrow will need to embrace change, see the future, build a strategy to get there and become an expert vision-caster.”
The overriding objective behind adopting a more customer-centric focus and remaining open to continuous evolution is to help your distributors grow their customer base and keep them—to achieve that holy grail of sales, the repeat customer.
“We’re finding that, especially with younger generations, they aren’t forming opinions on our company solely based on the products. They’re also looking at a company’s ethics, practices, and social impact,” says Kindsey Pentecost, It Works! Chief Marketing Officer. At the beginning of 2020 before the pandemic began, It Works! launched a sampling app that allowed distributors to share the company’s products with potential customers via their smartphones. “As we see this new generation of social sellers join the business, we know that they want on-the-go options to grow a business anytime, anywhere. Especially given today’s climate, this flexibility and ease are even more important,” adds It Works! CEO Mark Pentecost. “Customer experience has always been a priority for us. We don’t want customers for a month. We want customers for life.”
Increased customer acquisition and retention drove the direct selling industry’s growth last year. According to information from Transformation Capital, 2020 proved to be a record-breaking year on several fronts: 80 domestic direct selling companies generated more than $50 million in annual revenue; 25 companies were on track to grow by at least $100 million; 10 companies were on track to double their sales; and two companies—MONAT and Scentsy—grew in revenue in excess of $400 million.
“There is evidence that the more a direct selling company knows its customers, the more likely it will grow. Among 38 surveyed companies in our QuickPulse research, sales fell on average in 2019 for those companies that said they know their customers ‘not at all’ or ‘somewhat’ but grew on average for those whom they know their customers ‘very well,’” says Benjamin Gamse, Senior Marketing Research Manager at the Direct Selling Association.
The opportunity to sample a product and experience its tangible benefits is powerful to be sure—and it is what drives what Bjorgaard refers to as “good gossip,” or the natural inclination of consumers to share their product experiences with others. Service providers are in the unique position of not being able to offer the consumer the opportunity to try before they buy, which makes customer centrism an even more vital component of the selling proposition.
“Because we’ve always been a service company, we’ve always been a customer-centric company,” says Mark “Bouncer” Schiro, Chief Executive Officer at Kynect. “It’s been at the core of our belief system that if you focus on customers, it’s easier to build teams.” Since the pandemic began, however, the company has put extra emphasis on holding Zoom meetings, providing training for its associates in the field on such topics as using social media to grow their businesses, build their teams and create a strong sense of culture. “Our associates have been receptive to it because it was the only way they could build,” Schiro says. Kynect’s associate base demographics are rather unique; more than 50 percent of them are over the age of 50.
“When you sell a commodity, you have to focus on your customers. You can’t focus on the opportunity nearly as much. We’ve all had hiccups, but in the end, we continue to do what’s right and make it better for the customers’ experience and, ultimately, easier for our associates. We have to convince you that we’re doing right by your customers by providing fair value. We’re not the cheapest—we never will be—but we’re always competitive and offer a value proposition. Your associate is your concierge … how many people can be directly in touch with someone who offers them an energy product? We don’t expect our associates to be experts in energy; we expect them to be experts in customer service and empathy.”
He adds that while customer acquisition hasn’t increased, customer retention has. He attributes the phenomenon to the fact that many customers have been less likely to switch energy providers when they’re apprehensive about our economy and the stability of their jobs.
“Through social media, social influencers and the Internet, this world is becoming smaller and smaller. If you don’t focus on your customers, you’ll be found out quickly,” he continues. “We’ve been in business for 15 years, and we’ll continue to focus on our customers.”
In an effort to encourage the growth of customer centrism, Direct Selling News introduced its new Customer-Centric Recognition Program (CCR) in September. One of the unique aspects of the program is the willingness of participating companies who agreed to publicize their average number of active customers per active direct seller. For most companies, this is a new metric that may not have been measured and/ or publicized in the past. However, now that direct selling companies are processing and fulfilling orders that come directly from customers, obtaining the number of customers per active direct seller is possible. A 5 customers-to-1-distributor ratio earns companies a gold CCR designation, while a 10-to-1 ratio earns them platinum recognition. While company participation in the program is completely voluntary, publishing this simple statistic draws our attention to how many customers are actually being served, on average, by hundreds of thousands of direct sellers.
In 2021, brick-and-mortar and online retailers continue to struggle not only with the economic impact of the global pandemic but also with consumers’ growing preference for a highly personalized buying experience. Our industry can continue to distinguish itself—attracting loyal customers, enhancing our reputation and nullifying any lingering regulatory concerns—through our unique ability to provide a buying experience in which personalization and convenience aren’t mutually exclusive.
Not Just Another ‘Side Hustle’
The gig economy has received even more media attention since the global pandemic triggered an economic downturn, mass layoffs and job insecurity. Direct selling enjoys a competitive advantage when considered alongside “side hustle” opportunities like Instacart, Lyft or Taskrabbit: distributors receive education, professional development resources, digital marketing and tools to grow their independent businesses, along with a connection to a strong culture and a global network of fellow distributors. When we also factor in the industry’s growing focus on customer centrism—particularly when the average number of customers per direct seller begins to grow—the business opportunity becomes even more attractive in this competitive marketplace.
Direct selling is uniquely positioned to offer not just a means of supplemental income but the opportunity to build longevity—a business built on a strong foundation of satisfied customers. When 10, 20, or more customers are purchasing products each week, month or quarter, earning potential can become significant for the average distributor who simply loves the company’s products or services, shares her experience and influences others to purchase. Providing independent contractors with a flexible business opportunity and enabling the average person to use state-of-the-art tools and support—including a personalized e-commerce platform where customers can shop and purchase at their convenience—changes the game.
It’s important to note that effective customer centrism begins at home, with your employees—particularly those who are in the front lines of communication with your distributors.
“Your value proposition begins internally first,” says Bjorgaard. “It’s critical to make sure that every employee understands what you offer and what sets you apart from other companies. Your employees are essentially creating your communication channel strategy and are personally communicating with your customer and distributors. Once your employees have embodied your value proposition, it’ll be easy to infuse it in your social marketing strategy, your field-facing teams, and in all your corporate literature. It becomes second nature. It’s who you are.”
A more customer-centric focus leads to a stronger direct selling conversation—and that may be easier to understand for the masses whom we know are looking for income possibilities that can make a difference in their lives. A business model based upon more participants who are able to support the acquisition of more customers who continue to engage the brand, in turn, creates stronger companies, increased market penetration for brands and a more promising, successful and sustainable opportunity for those who become influencers of the brand: the new direct sellers.
“The biggest mistake any company can make right now is staying stuck in who you were,” Bjorgaard adds. “It’s critical for all of us who lead companies in our industry to share ideas and help take each of our companies into the future. This change is monumental for our industry, likely the biggest shift any of us have ever seen. We’re all trying to figure out our next steps. Let’s keep in mind that our real competition is with the B to C businesses—not so much with each other. Let’s help each other through this incredible change and make sure our industry is what helps the general public with incredible products and life-changing opportunities.”
In short, if there was ever a time to be customer-centric, it’s now!