December 01, 2017
Launching New Products and Segments
by J.M. Emmert
In This Issue:
Bringing Gender Parity to Direct Selling
Advocating for the Direct Selling Community
Navigating the Millennial-Driven World
Sticking to a Winning Business Model
Leading with Passion and Commitment
Launching New Products and Segments
Recruiting and Retaining the Field
Direct Selling Icons
When traditional retail companies consider launching new products or brand extensions, much time is spent on market research to understand the wants and needs of consumers. The direct selling channel is a bit different in this respect, according to the executives we spoke to about this topic. They each agreed that the consumer perspective is an obvious and necessary component of bringing products to market, and direct selling companies rely heavily on their salespeople to get at that perspective. For them, the opinions of, and feedback from, the sales field play integral roles in how new products or brands are developed and marketed, as well as how the needs of the consumers are tapped.
Technology—specifically, social media and online platforms—is also instrumental in marketing campaigns and launches for direct selling companies. Digital tools are used to communicate initial conceptualizations among key members of an organization, including sales leaders, as well as the development and release phases. Digital tools can also be the first true indicators of how well new offerings are faring in the marketplace.
Campaigns and Launches
The success of any direct selling company ultimately rests on how well its products connect to consumers. Product sales equate to sustainability and longevity. These leaders say that as companies look to expand their product categories with new offerings, they must consider every aspect from the consumer’s perspective.
Allison Levy, Executive Vice President and Chief Legal Officer, AdvoCare
Allison Levy oversees multiple departments at Plano, Texas-based health and wellness company AdvoCare, including legal, community relations and corporate communications, and also serves as the company spokesperson.
“Think about who they are,” says Allison Levy, Executive Vice President and Chief Legal Officer at AdvoCare, a seller of nutritional and weight-management supplements based in Plano, Texas. “What are their interests? What are their needs? How does the new initiative fit into his or her life? If a consumer is also a distributor, how will this new approach help them grow or improve their businesses? How does it fit in the bigger picture and relate to the AdvoCare brand that our distributors and customers know and love? These are baseline questions our teams ask as they begin the planning process for any marketing efforts.”
For personal and home fragrance company Scentsy, the recent launch of its bath bombs is a perfect example of the factors Co-Owner and President Heidi Thompson and her team take into account when considering new products. They start with a customer or consultant need or desire. In addition to market research, consultant feedback and requests help them determine new offerings.
“We strive to have a deep understanding of what will resonate with them,” Thompson says. “For me, making sure we are launching a product that our consultants want, and really strong internal planning, are the most important factors in bringing a new product or product line to market.”
Heidi Thompson, Co-Owner and President, Scentsy
Heidi Thompson co-founded Meridian, Idaho-based fragrance and accessory company Scentsy with her husband, Orville, which began in 2004 on their sheep farm and has grown to nearly $500 million in sales in 11 markets.
Cami Boehme, Partner and Chief Operating Officer at energy and sustainable lifestyle brand Viridian, believes developing new products must be justified by market reasons—that there are several factors a direct seller should consider, including shifting market demands, significant changes in the competitive landscape, the opportunity to do something innovative or fundamental changes to the company’s business dynamics.
“You just have to ask yourself very carefully what the driver for something new is and whether or not the disruption will be outweighed by the return on doing something new,” she says. “This is not always the case, and it’s not always easily evident. Our industry thrives in simplicity, consistency and duplication. Because of this, any new effort has to be carefully considered. Will the field embrace it? Will it attract new sellers or new customers? Does it address a clear and significant need within the current organization? Unfortunately, what seems like a great idea, a great change or a great extension can often fail in its execution if it’s too much change or steers you further from your core.”
According to these executives, whether or not the field will embrace a new offering is a viable question because, unlike traditional retail channels, direct selling companies have a unique relationship with their sales fields. In addition to selling products and the business opportunity, the field can be a powerful force in helping to bring new products to market. Obtaining their buy-in can help refine the products and greatly assist in the launch process. More importantly, however, soliciting their thoughts creates stronger bonds with corporate.
Cami Boehme, Partner and Chief Operating Officer, Viridian
Cami Boehme steers the sustainable offerings and operations of Viridian, the Norwalk, Connecticut-based green energy and lifestyle company.
AdvoCare’s Levy take a hands-on approach to obtaining field buy-in by speaking at numerous sales training events. She works closely with top leaders to effectively communicate throughout the company to ensure transparency and make sure that everyone is on the same page each step of the way. “We’ve managed to create a culture of unity among more than 650,000 distributors and customers by championing a proactive, collaborative philosophy throughout the organization,” Levy says.
Scentsy is always polling consultants to get their opinions, thoughts and ideas on products. Executives engage field leaders in closed Facebook Groups for fast alignment on ideas, which allows them to have conversations any time of the day or night. “It’s critically important for the field to be involved in and feel ownership of a new product,” Thompson says.
However, she also notes that it is often equally important to maintain confidentiality until executives are ready to officially announce a new product or brand. “Our leaders are very vocal, very proactive and good at keeping secrets,” she says. “They are all covered under a non-disclosure agreement, and we reinforce the need for confidentiality every time we ask for their feedback. Their involvement allows us to tweak product and marketing plans while also engaging them in early adoption and training their teams once a product or program has launched.”
Boehme believes getting the field’s buy-in is critical and should be an integral part of any company’s research when evaluating a new offering.
“Ultimately, any direct selling organization should view their relationships with their field members as their No. 1 and most valuable asset,” she says. “Everything else—even product and brand—pales in comparison to the value and power of a healthy and mutually trusting relationship between corporate and the field. Your business will unquestionably be in a better position when the field is a trusted stakeholder of corporate and they know that their feedback is a key consideration in decision-making.”
The Impact of Technology
The millennial desire for shareable goods has impacted the development of products and time-to-market strategies for many direct selling companies. But as great as their influence has become, these executives feel that technology is what continues to shape marketing campaigns for all companies in the channel, from initial research and development to manufacturing and through the actual launch phase.
“Technology is intrinsically linked to any launch of any type,” Boehme says. “You can’t really think about a new product or launch without thinking about technology in this market environment. Direct sellers and our customers are no different from any other consumer operating in today’s economy. Just think about what you personally have come to expect from any company you interact with in the digital age. You expect speed, transparency, simplicity, mobile, interconnectedness, intuitive interfaces, flawless execution. Anything less and you become quickly disinterested and disengaged. Our stakeholders are no different.”
AdvoCare often uses the Facebook Live tool in the format of a fireside chat to sit down with its research and development staff to discuss the ingredients and benefits of new products. In addition, instead of flying the company’s distributor leadership to Dallas to its headquarters each month, executives can get their thoughts on projects through a web conference call.
“Our product-to-market strategies remain largely unchanged, although our manufacturers are always looking to use technology for more efficiency,” Levy says. “The most important part for us in launching products is to make sure we have quality ingredients that pass not only our manufacturers’ testing protocols but our strict quality and informed choice testing.”
Boehme believes correctly using technology will not only make a company nimbler in getting a new opportunity to sellers and customers, but it will also make sellers nimbler in sharing their story, the company’s story and the new products with others.
“The biggest mistake a direct selling organization can make is to assume that somehow the opportunity will be great enough to overcome major gaps in the technology or experience delivered,” Boehme says. “We are competing with digital giants and companies that understand the need to deliver a flawless digital experience to end users. Our rate of growth in our products or our opportunity will be only as fast, nimble and viral as the technology experience that is wrapped around it.”
With any new segment or product launch, success is measured by how the brand or product resonates with the field and customers and, of course, by its sales. With social media and online platforms such as Facebook Live, results can come in well before any sales are counted.
At Scentsy, Thompson and her team track and analyze engagement in many ways, but social media is the most immediate and often the most accurate way to measure the connection and excitement of a new product or the adoption of a new program.
“Even before we start tracking sales, social media lets us know whether our consultants and customers love a new product or program,” Thompson says. “We are deeply connected to our consultants and fans on social media, especially Facebook. Within minutes of announcing a product, program or incentive, they let us know what they think.”
For Boehme, there is only one true indicator of the success of a Viridian launch.
“Sales,” she says.
“That’s it. It may be an overly simplified answer, but it’s the truth. Any other engagement metrics—number of people on calls, number of likes or shares on Facebook, open rates of email communications, number of live chats from your web properties, number of returns or exchanges, number of tweets—are only subsets that make up sales engagement,” she adds.
“Don’t be fooled by a sea of fancy dashboards and data science,” she says. “If sales are up, great. Use those other metrics to continue to refine your plan. If sales are down, you’re not connecting, you’re not resonating. Find out why and fix it.”