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September 01, 2011

Cover Story

The Social Media Phenomenon


Click here to order the Direct Selling News issue in which this article appeared.


by Brittany Glenn

DSN September 2011 coverTen years ago, social media did not exist. Today, almost all large companies and many small businesses invest resources into building their presence in the socialsphere. They have created corporate accounts on social media sites, and they spend time and money interacting with users, increasing their fan base, posting content, monitoring comments and measuring the results of their campaigns.

After all, the social media statistics can no longer be ignored by companies today:

  • Facebook boasts more than 750 million active users, and the average user has 130 friends.
  • Twitter has 200 million users generating 350 million tweets a day.
  • YouTube receives more than 3 billion views per day.
  • LinkedIn reports more than 100 million registered users.
  • A few weeks after Google+ debuted, the new social networking site accrued 20 million users.

According to the research-based advisory firm Altimeter Group, which conducted a survey of 140 corporations with at least 1,000 employees, the average number of corporate-owned social media accounts (including all business units, products or regions) is 178 per company.

Yes, social media has taken the business world by storm, and the direct selling segment is no exception. What started as a technological trend has turned into a central part of how direct selling companies do business today.

Multiple Means

How are direct selling companies using social media? Are social media sites viewed primarily as a means of communicating to distributors or external customers? Direct Selling News asked this of multiple companies in the industry—and discovered that the answers vary. We also asked each company which social media sites they used, as noted in parentheses.

“Our primary use of social media is to connect with the field,” says Brett Duncan, Vice President of Marketing for Mannatech (Facebook, Twitter and blogs). “It’s partly a distribution method but it’s becoming more of a conversation tool and a feedback tool.”

Dan Macuga, Vice President Marketing, PR and Social Media for USANA (Facebook, Twitter, YouTube and LinkedIn), also says distributors are the company’s primary audience.

“Additionally, we use social media to bolster the brand,” he adds. “It’s the way business is moving. It’s direct selling at its finest.”

However, other industry companies use social media as a means to engage primarily with consumers. “We have more customers on our fan page than we do consultants,” says David Sattler, Digital Marketing Manager for Scentsy (Facebook, Twitter, YouTube and Foursquare).

“We primarily use our social media platform as a tool to engage consumers,” says Yvette Franco, Vice President of U.S. Marketing for Mary Kay Inc. (Facebook, Twitter and YouTube).

Stella & Dot (Facebook, Twitter, YouTube and LinkedIn) also interacts with consumers on its Facebook page, which was named one of the 20 best company pages in the Inc. magazine story, “20 Awesome Facebook Fan Pages.”

“We use social media to spread the word on our brand and customer service, and to offer style solutions to our customers,” says Jessica Herrin, Founder and CEO of Stella & Dot.

For other companies, social media platforms are viewed as a means to increase engagement with both distributors and consumers as well as for brand-building, marketing and public relations.

“Our primary audience would be our distributors and our existing customers because social media is an engagement tool,” says Jeff Chandler, Director of Corporate Communications for XANGO (Facebook, Twitter and blogs).

“We also consider it as a retention tool.” Ryan Blair, CEO of ViSalus Sciences (Facebook, Twitter, YouTube and Vi-Net), says, “We’re giving our distributors the tools necessary for them to more efficiently market the business, enroll people and manage their businesses on mobile devices.”

Jim McLain, Manager of Global CRM and Digital Marketing for Amway (Facebook, Twitter, YouTube and blogs), says the company uses social media to tell the Amway story. “From a global standpoint we also use social media to build our product brands,” he adds.

“We view social media as a way we can strengthen our economic engine by maximizing effectiveness with our distributors, customers and other influentials,” says Kara Schneck, Senior Director of Corporate Communications for Nu Skin (Facebook, Twitter, YouTube and blogs).

Sarah Gulbrandsen, Communications Manager for Belcorp USA/L’Bel USA (Facebook, Twitter and YouTube), believes social media provides the opportunity to engage both internal and external audiences. “We’re able to give our brand a face and make it accessible for people.”

Benefits Boon

Being active in the socialsphere offers multiple benefits to companies. Social media sites can drive increased traffic to a company’s website, encourage product sales, promote brand recognition and loyalty, and provide a direct communication link to distributors and customers.

“Social media does a wonderful job at giving a brand a personality,” says Brett Duncan, Vice President of Marketing for Mannatech. “In direct sales that can’t be understated.”

The most obvious benefit that comes from being active on social media sites is that companies can garner insights and feedback from the multidirectional communication that takes place there.

“The main plus for social media is that you can hear directly and immediately from consumers,” says Yvette Franco, Vice President of U.S. Marketing for Mary Kay Inc. “It provides an avenue for two-way communication. Building the social community takes time, effort, resources and people dedicated to the initiative.”

Sarah Gulbrandsen, Communications Manager for Belcorp USA/L’Bel USA, says Belcorp values the immediate feedback they get from distributors and consumers. “It’s like an online focus group,” she adds.

Another benefit of social media sites is that they drive search-engine visibility.

“Social media benefits our SEO [search engine optimization], and we’ve done a lot to make sure we have great content,” says Kara Schneck, Senior Director of Corporate Communications for Nu Skin.

cover story

Changes and Challenges

Although it’s usually free to join social media sites, the sheer popularity of the socialsphere requires companies to devote significant resources to social media. Many companies have full-time employees dedicated to engaging with customers and distributors on sites, writing and posting content, monitoring comments 24/7 and analyzing metrics.

Monitoring tools such as Radian6 and content aggregators such as HootSuite provide helpful assistance, but at a price. Still, the greater toll is the time it takes to stay on top of social media.

“With social media it’s not so much an investment of dollars as much as it is an investment of time, which ultimately requires resources,” says Jeff Chandler, Director of Corporate Communications for XANGO.

Nu Skin’s Schneck also emphasizes that writing content and monitoring social media sites take time. “If you don’t have relevant, valuable, interesting and timely content, people are not going to continue to come to your site,” she says. “You also have to focus on monitoring, making sure that you’re being responsive to comments or questions that come up.”

David Sattler, Digital Marketing Manager for Scentsy, says that the change to becoming a content-publishing team is a big part of social media. “To be really involved in social media means that you become an organization that can quickly generate quality word-of-mouth content,” he says.

Participating in the socialsphere also necessitates relinquishing a degree of control. “You have zero control over what your constituents are going to post so you want to be prepared for how you’re going to deal with certain posts that show up on your wall or on your blog,” says Barb Alviar, Manager of Digital Marketing Services for Amway North America.

Belcorp’s Gulbrandsen agrees that one of the minuses of social media is the inability to control what’s being posted on sites. “People can post positive but they can also post negative,” she says. “You have to be on your toes and know how to respond  to that.”

Dan Macuga, Vice President of Marketing, PR and Social Media for USANA, offers good advice on how to handle negative comments. “The No. 1 thing I tell people about negative comments is to leave them alone,” he says. “There are people who don’t care for our industry or maybe they have had a bad experience, so they post negative things. As things get commented on or they get ranked, it draws relevance to that story, which will drive it up in search-engine results.”

Ryan Blair, CEO of ViSalus Sciences, adds even more weight to this, saying social media has changed how companies have to do business today.

“It used to be you could have a bad customer service experience and no one had any vehicle to tell people about it,” Blair says. “Now every direct selling company is on notice that they are one upset customer away from having a significant backlash to their brand.

“Companies like Apple, Zappos and Amazon are doing an exceptional job at customer service,” Blair adds. “If we don’t compare favorably, then they’re going to spend their money over there. We can no longer hide in the dens and living rooms. We now have to compete head to head with the Apples and the Amazons for precious consumer loyalty and discretionary spending.”

Executive Edict

One interesting trend to note is that several of the industry’s companies have executives who are active on social media sites—representing themselves and their brands. It is almost not enough for companies to be active on social media sites as corporate entities; their founders and executives may now also be expected to have a presence. This, of course, takes time—a precious resource for busy executives.

Executives at Nu Skin and XANGO also devote some of their spare time to social media. “Several of our executives have Facebook pages,” Nu Skin’s Schneck says. “Also, our executives blog about their experiences through our Nu Skin Force for Good Foundation.”

Chandler says several of XANGO’s founders and executives have active Twitter and Facebook accounts. “They are having regular interaction with consumers,” he says. “It really gives the distributors a sense of what the company is doing.”

ViSalus Sciences is another company whose executives take an active role in the socialsphere.

“I have close to 12,000 fans that follow me on Facebook,” says Blake Mallen, CMO of ViSalus. “We all  manage our own personal Facebook accounts. Facebook is a channel where you communicate your personality, and you can’t automate personality.”

Blair adds, “Every one of our founders has thousands of fans online. The world is all connected by a few degrees of separation. My advice to my colleagues is they shouldn’t go hire a social media department; they should become the social media department.”

Industry Innovation

Several of the industry’s companies have made notable achievements in social media innovation.

Belcorp regularly hosts “Facebook chats” where the company’s beauty advisors and customers can interact with the company via its Facebook wall. “Because our beauty advisor/customer base is primarily Hispanic here in the United States, we also do bilingual chats,” Gulbrandsen says.

Belcorp even hosts blogger events where beauty bloggers are invited to the corporate office for cocktails and hors d’oeuvres. “Our blogger events are aimed at bringing online communities together at offline events,” Gulbrandsen says. “They enable us to build key online community relationships while simultaneously informing new audiences about our company and products.”

Nu Skin offers a mobile application to help distributors share the business and product opportunity. “The application is designed to serve as a full-service app where you can shop, share presentations, track volumes and genealogy, view the latest Nu Skin videos and sign up new customers and distributors from your mobile device,” says Andrea Hayhurst, Vice President of Business Technology for Nu Skin.

ViSalus Sciences even trains distributors on how to use Facebook and Twitter to promote the Body by Vi Challenge in a social way. “When a distributor or promoter enrolls there’s a full training program called the Facebook Factor where we teach them how to turn their Facebook into a promotion tool,” Blair says.

In 2008, ViSalus introduced Vi-Net, a customized back-office application with social media integration. Mallen says the Vi-Net platform is similar to Facebook. “Everybody who joins the challenge logs in to a private community where they have profiles, photos and videos, and everybody has the common thread that they’re all on the challenge,” he says. “Vi-Net syndicates content so when you post to Vi-Net you can automatically update your Facebook and Twitter.”

Mobile Movement

In 2011, ViSalus went a step further and introduced the Vi-Net Mobile application, which is compatible with iPhone, Android and BlackBerry smartphones. Vi-Net Mobile includes a real-time dashboard with quick reports that allow distributors to see who’s close to the next rank or position in their downline. Distributors can enroll customers and distributors and even swipe credit cards through a device that attaches to a cell phone through the earphone jack.

For its mobile app, ViSalus also created a “reverse group offer” that allows the company to promote products Groupon-style.

“The reverse group offer allows us to introduce a short-term promotion where the more people who take advantage of it, the cheaper the price is for everybody,” Mallen explains. “Everybody on the mobile app gets notified when there’s an offer and the group sells each other because everybody wants to get the best price. So it creates a very viral promotion effect.”

The Vi-Net Mobile app also allows users to find and attend Body by Vi Challenge parties near them using their phones’ GPS capabilities. Once they arrive, they are able to “check in” via their phones.

“When you get within a certain vicinity of the party you can ‘check in’—similar to how Facebook Places or Foursquare works,” Mallen says. “People are always checking in to all these challenge parties, creating a viral frenzy.”

Blair says ViSalus intends to make today’s back office obsolete—meaning a distributor will never have to log in to a desktop or laptop computer unless he wants to.

“Technology makes our old-school, very simple business model sexy,” Blair says. “My goal is to have the most mobilized, efficient salesforce through use of technology on the planet.”

And although companies have traditionally struggled to measure the direct correlation between social media and return on investment, he dismisses this idea.

“Your company is going out of business if it doesn’t engage socially,” Blair says. “So your ROI is whether or not you have a company five years from now. There’s your ROI.”

With its emphasis on mobile technology, ViSalus has one foot in the present and one foot in the future.

“The mobile devices of tomorrow are going to be the center of the social universe,” Mallen says. “The companies that can move the quickest and maximize those channels with a social message and real transparency are going to redefine the boundaries of this industry. The future of network marketing really is social networking.”

“Mobile is going to shift the entire way business is done in the industry,” Blair says. “My advice to every one of my colleagues is to get out their checkbooks.”

cover storyFuture Trends in Social Media

What’s on the horizon for companies and social media? Are there any “must-haves” or “must-do’s” that companies should be aware of? Several social-media experts believe companies should keep their eye on two emerging trends: mobile technology and social search.

Gerry Corbett, Chair-Elect of Public Relations Society of America and CEO of Redphlag LLC, says the world is in the midst of a mobile explosion. “Sales of desktops and PCs are dropping like a rock and more people are using their smartphones as a replacement,” Corbett says. “Mobile is going to have a huge impact, and I think we’re only seeing the very beginning of it.”

Shane Rhyne, Digital Strategies Manager for Ackermann PR, also believes mobile platforms are the future of social media.

“It’s not an accident that one of the first things Google+ developed was a mobile app,” Rhyne says. “Google understands that is where the world is heading. If you don’t have a mobile strategy in place that includes social media then you need to start thinking about one. Within just a few years, smartphones/tablets will be the No. 1 device of choice for consumers.”

Kerri Scarbrough, Senior Strategic Director of Multi-Media and Mobile Solutions for VideoPlus, points out that mobile technology and social media go hand in hand. “We’re only going to see more and more integration of social media into mobile aspects, and that’s a trend that people just can’t ignore,” she says.

Something else companies might want to consider is that social-media sites are doubling as search engines today. Rhyne says, “When many people want to know about something their first instinct is not necessarily to go to a search engine anymore; it’s to go to their social network and ask the question.”

This is not surprising, considering the high degree of trust consumers have for each other in social media spaces. According to a poll by Econsultancy, 90 percent of consumers online trust recommendations from people they know while 70 percent trust the opinions of people they don’t know personally, such as those in consumer reviews. Additionally, Nielsen Online concludes that after friends and family, the No. 1 driver for brand trust is online reviews and feedback from social media sites.

User-generated content is simply word-of-mouth advertising in an electronic format, so it’s no wonder that consumers trust it. Consumers have relied upon their trusted networks—family, friends, co-workers, neighbors, etc.—long before Facebook was launched in 2004. But today, social media sites enable consumers to extend their reach considerably. Google’s addition of the “+1” button to its site is a nod to this trend.

“Search engines are building in the ability for your network and your habits to help feed and direct what results show up for you in a search,” Rhyne says. “That’s a fascinating yet scary proposition for marketers because that means it’s all about developing good relationships with consumers on social-media platforms. That will help drive your ability to be ranked highly in social search results.”


Shaping a Social Strategy

If your company hasn’t jumped in to the socialsphere yet, experts say it’s a good idea to first devise a strategy. According to emarketer.com, the most common elements that companies include in their social media strategies are resource-allocation guidelines for ongoing activities, registration of branded usernames on social sites and research into competitors’ use of social media.

“It’s a good idea to outline what your purpose is and to also figure out which networks are going to be the most relevant for your message,” says Sarah Gulbrandsen, Communications Manager for Belcorp USA/L’Bel USA.

Dan Macuga, Vice President of Marketing, PR and Social Media for USANA, says companies should determine why they think they need a social presence and then identify the goals they hope to accomplish. “You also have to make sure you allocate enough resources to monitor and update it regularly,” he adds. “You’ll fail if you don’t monitor and update on a regular basis.”

A strategy is a must for companies that are new to social media, says Yvette Franco, Vice President of U.S. Marketing for Mary Kay Inc. “There are many considerations for executing a plan, including: What audience are you targeting and how will you speak to them? Do you have a content plan and a steady source of content? Who will be responsible for managing and monitoring your company’s social media presence? How will you manage feedback?” she adds.

“If you don’t know what you want from social media it’s hard to sustain the level of resources and time that you have to devote to it,” says Kara Schneck, Senior Director of Corporate Communications for Nu Skin. “You’re going to have to figure it out at some point, so it’s better to start at the beginning.”