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December 01, 2017

Cover Story

Sticking to a Winning Business Model

by J.M. Emmert


Click here to order the December 2017 issue in which this article appeared or click here to download it to your mobile device.


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


Just a few decades ago, the direct selling channel enjoyed an unparalleled relationship with consumers. Its key points of differentiation—a personalized shopping experience through a trusted adviser, a try-before-you-buy policy, anytime ordering through representatives and convenient delivery—distinguished the channel from brick-and-mortar retail outlets. But in the mid-1990s, online retailers began to appear, and within the span of three decades have begun to catch up to the direct selling segment by using cutting-edge technology to provide customized shopping experiences and rapid delivery.

According to a National Retail Federation (NRF) estimate made earlier this year, online retail growth will continue to dwarf the growth rate of the wider retail industry. The executives we spoke with take this growth seriously, and are seeking ways to keep their distributors and customers in close contact in the modern digital age.

This often means that companies are working harder to both engage and retain consumers, especially the younger generations. A November 2016 report by the American Marketing Association showed that 80 percent of millennials are more than willing to switch brand allegiance if such a move would help them to earn rewards or discounts.

DEVELOPING NEW TOOLS

Direct selling executives are constantly pushing boundaries to develop tools that will continue to help their field engage customers with highly personalized methods. Linda Lucas Padilla, Chief Marketing Officer for MONAT Global Inc., an anti-aging hair-care company, likens it to a first date—you want to make a great first impression and then add those things along the way to strengthen the relationship.  


Sheryl Adkins-Green, Chief Marketing Officer, Mary Kay Inc.

Sheryl Adkins-Green leads global marketing strategy, product development, and marketing and advertising for the Dallas, Texas-based beauty and personal care company, having joined Mary Kay Inc. in 2009.

“That’s the approach we need to take with our customers,” Padilla says.

“Knowing your customers is key, so welcome them in a big way, and then make it a priority to analyze the customer data and purchasing patterns to build a more personalized CX (Customer Experience). The time taken to personalize communications and messaging will offer incredible results,” she adds. “Coupled with looking for those added ‘surprises’ in this process, something simple like a free sample or special how-to video makes a big difference in ensuring your customers fall in love with your brand.”

To thrive in today’s crowded, fast-moving landscape with the consumer attention span constantly shrinking, anti-aging skincare company Jeunesse is focusing on providing engaging product experiences that cannot be matched in a detached online environment.

“Jeunesse innovates constantly, designing pathways to build relationships and utilize technology,” says Meredith Berkich, President of North America.

“Our new internally developed lead management tool, found exclusively in our mobile app, provides a natural, simple, engaging series of steps for distributors to share relevant products with family, friends and colleagues through videos and sampling opportunities,” she adds. “Studies show that people still look to friends they trust for product recommendations, so at Jeunesse, we continue to connect people through familiar activities that make sense in today’s mobile-centric lifestyle.”


Linda lucas Padilla, Chief Marketing Officer, MONAT Global INC.

Linda Lucas Padilla provides strategic direction in marketing on key initiatives at Miami, Florida-based personal care company MONAT Global.

Sheryl Adkins-Green, Chief Marketing Officer at cosmetics and beauty brand Mary Kay Inc., says that while Mary Kay is sticking to its traditional service-oriented model whereby the consultant provides personal interaction, it is also investing in the technology to support not only the independent beauty consultants and their businesses, but also those which enable the company to broadcast the passion of a live event.

“We monitor not only from leveraging our technology partners but also listening to the independent salesforce about the kinds of capabilities that they feel help them to be more productive,” she says. “We are selective in terms of making sure the tools we provide them not only incorporate the latest technology, but also have the privacy and cyber-security features that are so important in this age of technology.”

One of the ways in which health and nutrition company It Works! is enhancing the customer experience is with its use of mobile apps. The company has integrated an app into the Wrap Party, its signature home-sample event led by an independent distributor.


Candace Matthews, Regional President, The Americas, Amway

Candace Matthews joined Ada, Michigan-based multi-product company Amway, the world’s largest direct selling company, in 2007 and currently leads all operations for Amway’s Americas region.

“After the party is over, the party guests have access to product information and tips right on their phone through the app,” says Co-Founder and Chief Networking Officer Pam Sowder. “Positive, personalized experiences happen each and every day, whether it’s a loyal customer having that in-person experience at a Wrap Party, or our independent distributors using their mobile app to connect and build their business. We’re constantly finding new tools and innovative ways to personalize the ‘It Works! experience.’ ”

Candace Matthews, Regional President, The Americas, at Amway, the world’s largest direct selling company, says, “Direct selling is the original social network and is a pillar of our business today. People buy from people they like and trust, and that relationship is critical to keep the competitive advantage of direct selling above the impersonal interaction encountered when engaged with some of the online giants.” She adds, “We must continue to innovate the experience because the experiential elements that are built through the personal relationships are the hallmark of direct selling. At Amway, we continue to invest in delivering the best products and experiences to our Amway Business Owners and their customers. That includes some experiential aspects many of us have come to expect as consumers in the marketplace, including digital connections, personalized service and delivery options.”


Pam Sowder, Co-Founder and Chief Networking Officer, It Works!

Pam Sowder co-founded the Palmetto, Florida-based health and wellness company It Works! and supports the field with training, mentoring and belief.

Corporate-Consumer Relationships

Many first-time buyers of a direct selling company’s product go on to become raving fans. Rewarding customer loyalty has become just as important as rewarding success in the salesforce.

At MONAT, the company is seeing substantial growth in its Preferred Customer Program and also has prioritized its strategic focus on the customer experience. “It’s an ongoing work in progress, and we are evaluating purchasing patterns and Loyalty Rewards ideas that are out of the box,” Padilla says.

“It’s important that we keep up with what is happening in retail in general because that’s who our customers will compare us to,” she adds. “Data is the key, but the most important priority is reducing any friction in the customer process.”

When it comes to acquiring and growing the customers base, It Works! utilizes a data-driven Loyal Customer Program that incentivizes independent distributors to not just gather customers once, but to grow their business by finding new loyal customers on a daily basis.


Meredith Berkich, President, North America, Jeunesse Global

Meredith Berkich leads Jeunesse’s North America region by focusing on strategic planning and salesforce development.

“We like to say, ‘It pays to be loyal!’ ” Sowder says. “So, in addition to growing with new customers, our Loyal Customer Program allows our existing customers to enjoy special benefits for being loyal, so they keep enjoying their It Works! products and experiencing life-changing results for years to come.” Matthews says Amway continues to look for new ways to connect with consumers of its products and to provide superior service to them. “Direct sellers are a volunteer salesforce and most participate in the opportunity on a part-time basis when it suits their needs and fits into their schedule,” she says. 

“Participants in the direct selling opportunity may be passionate users of our products, which just makes sense. We devote a lot of time and energy to understanding what products participant and non-participant consumers like and what they like about them.”  She adds, “We are also looking to strengthen our understanding of their interest in the direct selling opportunity and the reasons why some direct sellers participate more in the opportunity than others, and why they may change their focus from time to time. It is really about addressing the evolving needs of consumers and the marketplace.”

At MONAT, the Preferred Customer base is almost two times the Market Partner base. As a result, efforts are very focused on this important segment of the business. “Differentiating the communications and providing a great value-add to our flex ship offerings are key to our success,” Padilla says. “With each qualified flex ship order, we offer an innovative, free, full-size product supported by a fun social media campaign, and this has proven to be quite successful.”