July 31, 2016
Using Technology to Address the Needs of Our Business Model
by Joseph N. Mariano
At the U.S. Direct Selling Association’s hugely successful 2016 Annual Meeting this June, I reported on some of the thoughts and observations shared with me throughout the year from direct selling executives, industry suppliers, members of the field, international peers and colleagues, investors, the press, policy makers and regulators. These “soundings” included the need to promote direct selling as a dynamic, ethical and innovative marketplace force; the question of how best to embrace and capitalize on social and technological change; and the need to be more responsive to our salesforce and customers. I think all should form the core of our industry’s strategic thinking moving forward. Here is a taste of some of those thoughts and observations.
Advances in technology and greater access to data give us the tools we need to monitor the market and ensure that the selling and buying experience we provide is of the highest quality. We have traditionally—and understandably—been closer to our consultants than to the ultimate consumer. But one of the greatest challenges I have in representing direct selling to various interested parties is explaining why we do not know our customers as well as we should. Analysts do not understand how we cannot be more in touch with our consumers, and regulators (and critics of the channel) cannot be convinced of the legitimacy of our model if we are unable to tell them with certainty who the people are who are using our products.
But now we have the opportunity to harness big data and the latest digital technology to become experts on who the people are who keep our companies afloat, what they want and how we can better serve them. The bonus here is that this will not only eliminate one of the biggest criticisms we face, it will help us win long term in the marketplace.
We also should recognize and define personal use of our products in new and accurate ways. Let’s use technology and data to demonstrate that consumers of all types—distributors and non-salespeople—are freely and legitimately using our products.
We can take advantage of our unique ability to embrace the growing trend toward a sharing economy and independent work and offer an environment where everybody who engages in our programs ultimately feels good about them and our companies. The motivations of independent contractors and how/why they work also are changing, with surveys suggesting that compensation is of less interest to the next generation of direct sellers, the Gen Xers and millennials.
Let’s promote what we deliver best: access to the brand and preferred pricing on products, interpersonal skill development, social networking, and potential for supplemental income and resources that afford anyone an opportunity to start their own business.
Be proud of the fact, too, that most direct sellers are satisfied with what they earn, even if the amounts are modest. Direct sellers do highly value the other non-income aspects of their businesses, so why invite the criticisms and misunderstanding of the model by touting the potential for huge incomes? Celebrate those few people who turn direct selling into a significant business endeavor because it’s quite an accomplishment, but also unabashedly acknowledge that the top earners are outliers and that although the possibility is there for everybody, most people will not achieve that level of income.
Additionally, let’s create mechanisms to clearly differentiate customer classes and better identify those who intend to sell as true direct sellers. DSA is ready to help each individual member company identify opportunities for the adjustments that will allow us to clearly demonstrate this reality of our business.
By embracing the tools of technology, data and the new economy, direct selling can become the preeminent business and economic force, because it is here that we can transform the public and regulatory perceptions of our business and become better understood and valued as the global model of entrepreneurship, empowerment and change.
Joseph N. Mariano is President of the U.S. Direct Selling Association and the Direct Selling Education Foundation.