May 01, 2015
The Pulse of Today’s Party
by Courtney Roush
Back in the early days of direct selling, legends like David McConnell, Mary Kay Ash, Mary Crowley, Charlie Collis and others ushered in a new business model and created a seismic shift in seller demographics. The concept of home parties was an immediate hit with women, and it would show the old model of door-to-door sales… well, the door.
Home parties gave women the flexibility to build a business on their schedules and on their own terms. The atmosphere of a party made it more comfortable for women to sell products, grow their businesses and realize their potential for success. It was within the home that lifelong relationships with customers—some of whom would become team members—were born. Unhurried, face-to-face interaction was everything; and for consumers, being invited into someone’s home showed an implied trust that greased the wheels for an easygoing and loyal friendship with their consultants. That rich history is why parties have always been a powerful way to introduce prospective customers and future team members to the wealth of products and boundless opportunities this industry brings.
Changing times, expansive technology and shifting consumer behaviors have all affected the traditional definition of the home party. Some companies have removed themselves from the realm of party plan altogether by referring to their offerings as “social selling opportunities.” Some have sounded the death knell of the party, believing it to be outdated and stale. Yet still other companies such as Zurvita and Nerium, not traditionalists in the party plan legacy, are looking for success in adapting the traditional model and training their field to leverage the group-selling dynamics.
Lately, the increased use of technology also adds interesting layers to questions about what actually constitutes a “party.” Technology often plays a key role in the before-, during- and after-party interactions. Sometimes technology is the only interaction, with posts on a Facebook page, a Twitter feed or a link to a promotional video creating virtual parties.
A ‘Party Plan Panel’ Weighs In
These questions and new approaches to the traditional party plan model inspired Direct Selling News Publisher and Editor-in-Chief John Fleming to lead a panel discussion during SUCCESS Partners University held April 8–9 in Dallas. Panelists included Orville Thompson, Co-Owner and CEO of Scentsy; Connie Tang, President and CEO of Princess House; and Mike Lohner, Chairman of the Board of Stella & Dot. Each agreed that the party isn’t over yet, although its definition now is broader than it has ever been.
During the session, the panelists discussed three major challenges faced by the direct selling industry, articulated by Thompson: brand fatigue, commoditization and generational adaptation.
Brand fatigue refers to a market becoming saturated with a large group of consultants, and people in similar circles are invited and reinvited to similar parties. Brand fatigue can also affect recruiting for the same reasons, becoming a barrier for a new consultant to be excited about a specific opportunity. It can also affect the willingness of hosts to muster the energy to hold a party.
With brand fatigue, consultants find that their success has anchored them firmly in the sand. The companies they represent are household names, and the novelty has worn off. Parties may become less successful and less energized as consultants have trouble finding those willing to host a party multiple times. Regional brand fatigue can be a common stumbling block too, for example, if a ZIP code is flooded with consultants tapping the same groups of people at school and at work to be a host.
Tang explained an interesting twist on this idea, calling it, in the case of longtime Princess House customers, “misplaced brand fatigue.” She said this happens when consumers who purchased your products ages ago are under the mistaken impression that you’re the same company decades later with the same product offerings. Tang says, “People will tell us they have our crystal up in the attic years later. How do we dispel the notion that we’re still just a crystal company? Those who bought our crystal don’t know that we now have cookware. This is our challenge.”
And brand fatigue isn’t just a consumer problem. “It affects consultants, too,” Lohner says. “As direct selling companies, we have to keep our brands vibrant. People buy products based on how they make them feel, and we have to think about this every single day. We also have to help consultants overcome their own brand fatigue. Then churn rates go down, and business really booms.”
Commoditization refers to the growth of additional competition in the marketplace for similar products, especially those produced on a large scale. For example, some product lines such as affordable home décor or even scented wax warmers for a time were only available through the independent consultant holding home parties. As those product lines succeeded, new companies emerged and giant retailers such as Wal-Mart and Target began offering similar items on their shelves. The scale of the competition adversely affects the ability of a smaller direct selling company to remain competitive.
Both brand fatigue and commoditization have inspired many companies to launch additional brands in an effort to keep product offerings exciting and relevant—and capture and retain more consultants and customers. Scentsy is one example. Its status as the first flameless candle was intruded upon by competing brands entering the retail space, as noted above. Scentsy ultimately launched three additional brands, only to shut one down later. Trial and error, Thompson says, comes with the territory of building brands.
Generational adaptation refers to the lag time that exists as each generation, with its own demographically driven “personality,” turns the reins over to the next, and the adjustments a company must make in messaging, training, product presentation and even product development in order to remain relevant to that new generation. For example, Gen X—characterized by many for pragmatism—must make way for millennials, known more for their idealism.
Tang says her company turns to its core consultants for input before initiating big changes. “We need to ask those consultants, ‘Does this shift fit?’ ” she says. At Princess House, “we dove into what made our longtime consultants successful. We asked ourselves, ‘What do they know that we can learn?’ ”
While it may seem counterproductive to reach into the past to find out how to be successful in the present, it’s not, Tang emphasizes. “Any changes we make—whether it’s to the compensation plan, the products, anything—still need to carry our values. Those can be shared cross-generationally. Millennials may express themselves differently, but the values are the same.”
In truth, every product company, including large-scale retailers, faces those challenges in various forms. Still, all three of those market realities make it imperative for direct sellers to ask themselves—and often—how to keep their longtime consultants moving up while they reach out to newcomers. The home party continues to evolve against that backdrop.
Customer Service, Fun and the Role of Technology
So why does the home party continue to work for some companies? Perhaps it’s because the whole of direct selling was built on two concepts that never go out of style: exceptional customer service and social fun. Customer service remains important to customers. In fact, in the world of commoditization, excellent customer service may be the only true differentiator for maintaining a viable competitive advantage. While technology can certainly support customer service, it can never replace it. The most successful independent consultants are those who use technology as an enhancement, not a replacement, for real-life gatherings and personal interactions.
In an effort to keep current with trends, Zurvita put a strong emphasis on technology in the beginning, only to discover that “old-school service still works best,” says Mark Jarvis, Founder, Co-CEO and President. “We’ve really made a push in the last year to get back to the basics of relationships, and it’s been the best thing we’ve done. We’ve seen recruiting go up, and with those new recruits, more activity within the first 30 days.”
That isn’t to imply that Zurvita reps’ mobile devices and PCs are gathering dust. “Obviously, we still use technology; it gets people to parties. Teaser videos, texting, social media posts—all of that helps. But I think people have started relying too much on technology. With this shift we’ve made back to basics, they’re having fun again.”
Which leads us to the second bedrock of direct selling: fun! The chance to socialize with others and meet new friends while shopping for great products is the exclusive domain of the home party. Humanity’s need to socialize, coupled with a good host program and great products, will keep the home party going strong for some companies.
Nerium International encourages its consultants to build their own parties and get creative. “We’ve seen guests come back to parties repeatedly just to have fun,” says Mark Smith, Chief Field Officer. “It’s such a relaxed setting that they want to be part of it—and eventually, they’ll buy something.”
Party settings for various products could be at a coffee shop, a restaurant or wherever people put their feet up at the end of a long day, but it appears the majority of parties continue to happen in the home. And using the word “party” is up to the consultant. Some may call it a “gathering,” “get-together” or other term; the creative license is all theirs.
At Ava Anderson Non Toxic, the term “party” has been replaced with the moniker “avaHOURS” to emphasize their 60-minute duration, which busy customers find appealing. Consultants devote 20 minutes to education, 20 minutes to product sampling and 20 minutes to closing. “Successful consultants are able to read the room, gauge their guests’ engagement and the questions they’re asking, and determine if they want to tailor their approach or shorten or lengthen the presentation,” CEO Ava Anderson says.
Flexibility is also a form of customer service, meeting customers where it’s convenient for them. Sales consultants for Thirty-One Gifts can hold parties anywhere they can access Wi-Fi, so they hold them not only in the home, but at restaurants, libraries and other public places, according to Leesa Martin, Director of Market Research. Many of the consultants who host fundraisers will often host the party at a nonprofit—the Humane Society, schools, hospitals and more.
“We’re also seeing a trend toward augmenting live parties with virtual online parties,” Martin continues. “Our consultants often use Facebook to reach people who couldn’t come to an in-home party and to actually host a party. They can reach people at their convenience and can host a party for people who live long distances away.”
Some might argue that a customer’s experience—and a consultant’s bottom line—both are enhanced by the opportunity to hold products, sample them on the spot and discuss complementary products.
“Consumers are asking more questions now. They’re informed, and they want to know about product ingredients,” says Mark Smith. “So that means we have to be prepared to answer customers’ questions. We have to be the one-stop shop.”
In our overscheduled world, a direct selling party offers consumers a chance to pause—and that’s another significant factor behind the popularity of this business model. “People are so busy every day that a party really needs to be a fun escape from commitment instead of an additional one,” says Sara Friedman, Vice President of U.S. Marketing for Mary Kay. “Parties have become less formal and often are come-and-go social events versus having to be at the party for the entire time.”
Thirty-One’s Martin agrees. “For a company that’s had more than 1 million parties in the past 11 years, we’ll always have them because parties give women an opportunity to connect with family and friends in today’s busy world,” she says. “Parties enable stay-at-home moms to get out of the house for a little while and connect with girlfriends, and working women get to relax and be with friends whom they may not have time to connect with in person otherwise. It’s something women enjoy.”
Tammy Smith, a Chief Field Officer with Nerium and wife of Mark Smith, adds, “We want this business to be built around people’s lifestyles. Parties are designed based on what people like to do in their downtime—how they relax.” And that means everything from a wine and cheese gathering to a dessert party, a Mardi Gras-themed bash, or pizza and beer with the guys. “Nobody wants to leave work, come home, change clothes and then go to a business meeting. They want to go from their jobs to a relaxed setting,” she says.
Technology Raises the Bar on Service
In keeping with the industry’s “people-first” principles, direct sellers increasingly are leveraging technology to help independent consultants retain loyal customers. Technology enhances Thirty-One’s customer experience, allowing them to preview embroidery on products and experiment with thread color, font, size and more. “Our new technology also facilitates bulk personalization,” Martin says, “making it much easier for consultants to submit large orders of products with the same personalization—a Little League team, for example.”
In recent years, Mary Kay has rolled out a series of mobile and online tools designed to help consultants market their products in an interactive and fun way, enhance the “try before you buy” experience for customers, and capture the attention of more millennials. Apps—among them the Mary Kay Virtual Makeover, Show and Sell, and a Regimen Advisor—may be used during parties to show videos, share product benefits and discuss the business opportunity; while follow-up tools like automatic reorder reminders and e-catalogs can help sales continue long after the party has ended.
All consultants can use technology to “warm the market,” so to speak. Initial contacts are generally people closest to them—neighbors, friends and family—who may be more readily receptive to a home party. Once a consultant steps outside that familiar circle, they’re more likely to use technology as a means of introduction, a way of getting acquainted with potential new customers and even recruits.
Company executives agree that no matter how materials are provided to the salesforce, what will never change is the importance of their direct relationships with their customers. Technology, especially social media and communication tools, simply makes managing those relationships quite a bit easier.
In the next three to five years, what can we expect to see? Varying degrees of technological bells and whistles, a continued emphasis on understanding consumer expectations across demographics, and above all, maintenance of that gold-standard personalized service for which direct selling is revered.
“Homes will remain the primary party location, as they’re warm, welcoming and inviting,” Friedman says. “I think presentations will continue to become shorter, with more testimonial-style sharing among friends, as that fits a come-and-go party. Perhaps a YouTube video that any guest can pull up will give additional depth to what the Consultant, hostess or other guests have shared about a product. Orders will continue to be placed with the assistance of technology so that receipts will be texted or emailed, and inventory can be replenished with the push of a button. While technology is a big part of the ordering process today, it will be even more streamlined in a few years.”
Mark Smith at Nerium anticipates the future for their parties will include tying several together with a Skype presentation given by one of the leaders. “In the years ahead,” he says, “relationship marketing will become a more digital arena.”
Thirty-One’s Martin adds that while she anticipates technology continuing to make it easier, faster and more efficient to have a party, “personal relationships and fun” will remain at the center.
Mark Smith adds, “Relationships are the ‘super glue’ that holds the industry together. We have to balance high-tech versus high-touch. We can’t take people out of the people business.” Indeed, many direct sellers can share stories of lasting friendships made between consultants and their customers.
Perhaps part of the reason why the party is still going strong is that in this sea of technology in which we’re all wading, personal contact stands out as an anomaly. When it comes to the art of conversation, direct selling has the market cornered. Superior customer service and long-lasting relationships remain timeless trends, but make no mistake: The industry is solely focused on the future.
And as for the challenges facing the industry today? Stella & Dot’s Lohner sums up the optimism that pervades an industry that offers opportunity to people from all walks of life: “The emotion, passion and joy that can come from this business make up our secret sauce. We understand the power of selling what we love to people we love, so we can help make their world a better place. Keeping this in mind can help us overcome these challenges, which every business faces. We can build something not just world-class, but world-changing.”