May 01, 2015
The Emergence of the Digital Sidekick
How to Maintain Consumer and Distributor Engagement
In this Q&A, Leslie A. Koll, an Advisory Board member for H2 Wellness, a digital health solutions company, shares his perspective and insight as a consultant to the direct selling industry on ways that today’s companies can leverage new technology to maximize consumer engagement and lifetime value. He focuses on three key ideas:
- It is critical to improve consumer retention and lifetime value.
- Develop new ways to close this “engagement gap”; do not repeat the same strategies and tactics hoping for different results.
- Incorporate digital engagement technology into your business mix.
Question: You were at Jenny Craig in the 1990s, directing all marketing and instrumental in initiating its digital strategy as well as growing its worldwide franchises. How did you get involved with the direct selling industry?
Les Koll: It was a natural fit. The direct selling business has challenges similar to what we faced when I was with Jenny. You have to recruit new franchisees and consumers while servicing customers. Everything works beautifully as long as you can convince your audiences to “stick with it.” Unfortunately, the reality is different because it’s incredibly challenging and expensive to keep large populations of individuals engaged and motivated—notwithstanding whether they are franchisees, consumers or direct selling distributors. As a result, this generates a cycle of turnover, which leads to high acquisition costs and limits lifetime value—total expected revenue from a customer over the entire length of time of the relationship with the company.
Question: How would someone begin to break this cycle?
Koll: First, you have to buy into the idea that you can do something about it. You have to start with the idea that something else is possible instead of high turnover rates.
Once you believe this, you have to understand why the problem is happening to focus on the right solutions. As an illustration, many distributors go to events to hear upline leadership and motivational speakers, receive training and experience new products. By design, the atmosphere is electric. Distributors return home, excited and charged up, but then the motivation begins to ebb as the days and weeks go by.
It often takes another big event to recharge everyone. This is very similar on a smaller, more intimate scale to what occurs when a distributor initiates a sale with a consumer—enthusiasm and involvement followed by an inevitable decline and reduced product usage. The key is to bridge and manage the “engagement gap” during the time between these events to keep both distributors and consumers on track and buying your products. Plus, you have to execute in a way that is meaningful and valuable to each distributor and consumer.
Question: The idea makes sense, but how exactly does a direct selling company do that across such large populations of distributors and consumers?
Koll: This is where technology comes in. Just like CRM systems, which have helped transform marketing, there’s a new breed of technology called digital engagement. And there are companies in different industries that are leveraging it to great effect. Companies like Limeade® in employee health, Wellframe® in the healthcare industry, and Life Time® Fitness in the health club industry.
With the ubiquity of mobile devices, they’re proving you can deliver significant and engaging experiences to support each individual’s unique goals, whether we’re talking about fitness, weight loss or what have you. These technologies help guide and motivate individuals to take the recommended actions through the daily course of their lives. When you can do that, you naturally see a lift in consumer health outcomes, product sales, consumer retention and lifetime value—which, in the end, are what make every distributor successful.
When you imagine a system like this—one that is extremely efficient, scalable and yet personal at the same time—it opens the door to a whole new way of engaging, supporting and retaining your distributors and consumers, no matter the size of the population. That’s powerful.
Question: Are there any barriers to using such a system?
Koll: Yes. Until recently, the adoption barrier was twofold: Either the available system wasn’t customizable or it took a considerable investment in time and capital to build a company-specific solution to spec. What’s more, some direct selling companies have limited internal IT infrastructure to build and maintain these behavior modification systems over the long term. Fortunately, as digital engagement technology has evolved, it is now becoming accessible to companies of any size and complexity.
Question: Please elaborate. How is digital engagement technology now becoming more accessible?
Koll: There are digital engagement companies pioneering a different approach. Rather than giving you a one-size-fits-all platform or building a custom solution from scratch, it’s now possible to build your own branded digital engagement platform at a fraction of the time and development cost. This change required the following revisions.
- A single digital platform that doesn’t have to be rebuilt over and over again. And it has to be ready to work across any type of computer or mobile device.
- A library of “ready-to-go” modules that can be configured, in any combination, to address the needs of different direct selling companies.
For example, a direct selling company may have an integrated program that includes nutrition, fitness and weight-loss products. So they will need the specific tools that allow users to plan the right meals, create an exercise program and understand what products are appropriate for them. They may also need tracking tools to analyze the consumer’s behavior and daily progress, such as caloric intake, macro/micro nutrients, weight, activity, etc. And with all the different wearable devices available today, there may be a desire to have the platform integrate into FitBit® or Jawbone® or some other external activity tracking device.
Because human understanding and motivation are always the biggest points of failure, what’s most important are the specific tools designed to deliver targeted education, engagement and support. This can include digital coaching, social media, challenges and rewards, or the ability to have secure messaging between a live distributor and a consumer.
- The possibilities are many, and so are the configurations. This needs to work in a way that is fast, efficient, and reflects the specific needs of each direct selling company.
- The platform obviously has to be privately branded. From a company’s logos and colors to showcasing a company’s own products, programs and content, this has to be easy to integrate into a digital engagement platform.
- Finally, the system has to be easy to implement and maintain. Fortunately, with the widespread growth of the SaaS (software-as-a-service) model, these days you shouldn’t have to install software on individual computers or hire IT staff to maintain these systems.
Question: So, if you were advising a direct selling client on implementing a digital engagement system, are these the best practices you would recommend?
Koll: Yes. They are what I call the backbone requirements. Clients may have other needs and requirements to consider, such as systems integration, data analysis and reporting. But at the core, you start with the idea you want to avoid the unnecessary cost and risk of building and maintaining software. And you should never compromise your needs with a system that’s inflexible.
Question: Any closing thoughts?
Koll: It’s important to remember that like any technology, digital engagement is not a panacea. It has to work within a broader enterprise strategy and tactical plan that addresses the specific needs of a direct selling company. If you’re willing to do the planning, and allocate the necessary resources to execute, digital engagement can be an absolute game-changer, creating a powerful competitive advantage.
Leslie A. Koll is an Advisory Board member for H2 Wellness, a digital health solutions company, and a consultant to direct selling companies with Pelletier, Koll & Weill Inc. He is former Chief Marketing Officer and Executive Vice President, Franchising for Jenny Craig Worldwide.