A powerhouse panel of direct selling company CEOs spent nearly two hours on stage as part of the World Federation of Direct Selling Associations 2014 World Congress in Rio de Janeiro, Brazil.
Mary Kay Inc. CEO David Holl, Amway President Doug DeVos, Oriflame Cosmetics CEO and President Magnus Brannstrom, Herbalife International CEO Michael O. Johnson, Avon Products Inc. CEO Sheri McCoy and Nu Skin Enterprises CEO Truman Hunt participated in a conversation moderated by WFDSA Chairman Alessandro Carlucci. Their topic of discussion: “The Future of Direct Selling in an Increasingly Connected and Borderless World.”
Their message: Each company must choose the right technology, at the right price and right time, and then provide the right training in order to maximize the return. At the same time, it is important to remember that direct selling, at its core, is not about technology at all. It is about one person sharing a product or opportunity with another.
“One of the things that I have championed and people who have come before me, I think, have championed as well is to keep this business simple,” Holl said. “You can come up with a lot of technology. In my opinion if you let the IT department lead you down that path, it will be great technology but the sales force might not use it because it is overwhelming.”
DeVos echoed that advice to keep things simple, recounting Amway’s experience with its launch of the Internet-focused company Quixtar. “We got ourselves upside-down in the late ’90s, in that we wanted to be a technology opportunity,” he said. “We were trying to be something we weren’t. …Our experience there helped us say, ‘We’ve got to figure this out in a different way.’ It’s about people. It’s about keeping it simple. It’s about the right pace to have technology be empowering and enabling to our salesforce.”
But even as each company represented on stage strives to keep their technology implementations simple, the CEOs agreed doing so requires a significant financial commitment. To that end, McCoy underscored the importance of testing new technologies on a small scale before an enterprise-wide rollout. “As we are trying to learn more, more experimentation and testing differing things in different markets is more important to me than the amount of money,” she said. “If it works, I’m willing to spend, but my message to the team is, ‘Let’s look at the return on investment, and are we driving growth through our field force?’”
Of course, technology is not the only avenue for growth in a connected, global economy. Geographic expansion is certainly another popular path, and the World Congress agenda included deeper discussion of two markets: China and Latin America. However, the panelists agreed, many companies may find opportunities for growth in their own backyards. “To me, the only place in the world where direct selling is the predominant channel to the consumer in our main categories, health and beauty, is right here,” Hunt said. “Avon and Natura have done such a phenomenal job maximizing the value of our channel here in Brazil, but nowhere else is that the case. …There is so much potential in existing markets. We don’t even necessarily need new markets, we need to maximize the potential of the markets we are in.”
For his part, Brannstrom challenged the audience to look into the future to discover new categories for direct selling that don’t exist today. Don’t restrict your thinking to the way your business is today, he advised. “This personal recommendation is a profound difference between us and many others, which will take direct selling into new categories that we aren’t even in.”
The panel also discussed some of the challenges facing direct selling globally today, particularly around issues of reputation and government regulation. One of the key strategies to overcoming these issues, the group agreed, is demonstrating a willingness and commitment to self regulate, both at the company and DSA level. Another is to encourage the millions of independent business owners in direct selling to be more active in their communities and more vocal about their positive experiences with the profession.
“Outside this room and outside a distributor’s life every day, this business is mysterious to people,” Johnson said. “There is an elite group out there who gets to package our business for us, which is very unfortunate. They package it in the media and they package it sometimes at the regulatory level and they get to package it sometimes for their own self-interest, and it’s easy to do because if we don’t self regulate, there is going to be a victim every now and then of our business. And, unfortunately, they get a volume level that is way higher than the normal reality of our business day in and day out: people working hard, people making a few bucks, people making a few more bucks or people making a lot of bucks if they really work hard at building a huge organization.”
The real message, he said, has to be local. It also will take long-term effort. “If you get your people … engaged in city councils, in nongovernmental organizations, in state and national representation, you are going to be much better off for it.”