August 01, 2015
Young Entrepreneurs Still Working the Summer Strategies: CUTCO and Southwestern Advantage
by Carol Brzozowski
Founded: CUTCO, 1949; Vector Marketing, 1985
Headquarters: Olean, New York
Executive: James E. Stitt, Chairman, CEO and President
Products: Home care, kitchenware and appliances
Headquarters: Nashville, Tennessee
Executive: Henry Bedford, Chairman and CEO
Products: Educational reference books and software
|Vector Marketing representatives win CUTCO prizes during a “Crazy Clothes” contest.|
College students are an attractive pool of potential recruits for direct selling companies. They tend to be open to new life experiences and eager to learn, which makes coaching easier than with groups that already have established more deeply rooted habits and beliefs. They are comfortable with new technology and are passionate about sharing their favorite things with others. And, particularly during the summer months, they are likely to have flexible schedules that lend themselves nicely to building a direct selling business.
The challenge, of course, is that the preferences of college students change perhaps more rapidly than in any other sector of the workforce. What’s in fashion this month may not be the case next month, whether it’s the latest sunglasses craze, a trendy new app or a business opportunity.
Staying nimble enough to appeal to this group year after year is no small feat. Yet, with very little fanfare, two direct selling companies have spent decades building their salesforces largely with this demographic group: Vector Marketing, the marketing arm for CUTCO knives, and Southwestern Advantage, which sells educational products. These two companies have developed methods for staying in tune with the likes and dislikes of young people, what motivates them and what keeps them engaged—all while consistently building teams of well-rounded, self-disciplined and hard-working independent sales representatives. A Direct Selling News analysis of the two companies revealed four common elements of their success.
1. Communicate the Bigger Picture
Joining Southwestern Advantage or Vector Marketing is, and always has been, about more than selling books or knives. Both companies offer an appealing income opportunity as well as programs to build important life skills, such as perseverance, integrity, keeping one’s word, and hard work—not to mention that ever important goal of employability.
Southwestern Advantage has been making this pitch the longest. Southwestern, its parent company, was founded by the Rev. James R. Graves in 1855 in Nashville, Tennessee, and began its direct selling program for college students in 1868, after the Civil War devastated the economy and Graves sought a way to help young people finance their schooling. That concept continues to resonate even today; students were hit hard during the recent recession, and many continue to struggle with the cost of tuition.
“Where there’s a need for people willing to work hard, follow a proven system, and use their best efforts at entrepreneurship, they can do really well with us,” says Dan Moore, Southwestern Advantage’s current President.
|A Southwestern student dealer may start their business reaching out to family, and spread further out into their community as they become more comfortable.|
Rebekah Hyde joined Southwestern Advantage as a University of Georgia student. As an athlete, Hyde says she was attracted to the program’s challenges, energy and competitiveness and sought to do something outside of her comfort zone. She made $15,000 the first year and relied on her belief that “there is a greater purpose out there—it’s not just about selling books, it’s about the character and principles I was forming. Every summer I would meet someone who bought the products in the past, and I saw how it had impacted them.” She now passes on the skills she learned as a Southwestern Advantage sales manager, working with students at eight colleges in five states doing event planning, hiring and training.
Like Hyde, Clayton Balistreri says he gained valuable sales experience selling CUTCO knives during his high school senior year. “CUTCO was a perfect job for me because I intend to be a salesman after college,” says Balistreri, now a Florida State University sophomore. He plans to join his family’s real estate business after graduation. “What’s funny is I started selling CUTCO because I wanted experience for the real estate and insurance business,” Balistreri says. “When I asked my father about making sales calls, he told me that in real estate, you have a phone list of names, follow a script, and ask people to buy. I realized all sales are the same, so I started making more calls.”
Balistreri advises students considering direct sales to “have fun with it and don’t get discouraged when people say no. It’s the first job where you get to manage your time by yourself and one of the few jobs available that teaches you to become a professional.”
2. Make It Fun
Another key to successfully recruiting and retaining young people is creating opportunities to have fun through work. For Vector Marketing, that means keeping office environments, training sessions and team meetings fun and laid back, says Ryan Long, Vector Marketing’s Content and Public Relations Manager, who herself sold CUTCO after college graduation. During the nighttime team meetings, especially, the group gets together for networking and fun—all in an environment that nurtures building relationships and bonding. That may entail playing miniature golf, bowling or having games in the office such as “CUTCO Jeopardy.”
“We’ve found that our young people are competitive and motivated by contests,” Long adds. “Students like to win. They like bragging rights. Sometimes they win things like CUTCO products and trips, but sometimes they do more fun things like pie-in-the-face contests.”
Making sales fun is a never-ending process for direct selling companies, as young people’s definition of fun shifts over time. Millennials, for example, have proven to be a service-minded and cause-oriented group, and it’s best to tap into that when recruiting them, says Trey Campbell, Southwestern Advantage Director of Communications. “They’re not always in it for themselves, so if you can have an aspect to what you’re doing that pulls on their heartstrings and emotions—something they care about—then they’re much more likely to be engaged,” he adds.
That’s why, Campbell says, Southwestern Advantage has found that value-added training, including life skills as well as sales lessons, is even more attractive to young salespeople.
“Young people don’t have habits established, so you have an opportunity to provide them with habits that will be good habits and will last a lifetime,” he says. “Millennials tend to be a lot more open to life experiences. They are a very coachable group. It makes training easier because they are eager to learn.”
3. Involve Parents and Other Community Adults
The rise of the so-called helicopter parent has made an impact in the direct selling space. Parents, Campbell says, express numerous concerns related to their children’s sales experiences. The best course of action: Go with the flow.
“They want to know their kids are going to be safe,” Campbell says. “They are very involved in their kids’ decisions and lives, which is great. Part of that comes from all of the things that parents get involved in, such as traveling and sports, when their kids are younger and it carries through to college. We respect that and that’s why we want them to be part of the program as well.”
|A student representing Southwestern Advantage demonstrates products for a family interested in educational materials.|
Southwestern Advantage reaches out to students through recommendations from other students. Those interested attend on-campus information sessions and follow-up meetings. The company rounds out the recruitment process by meeting with parents for their endorsement of the students in the program at a coffee meeting near campus. Such meetings have been a policy for many years in the interest of transparency, says Campbell, adding that parents sign an endorsement letter, even though the students are legally adults.
“We find the success rate is a lot greater when parents are supportive of the young people who participate in our program,” he says. Some of the parents had sold the product when they were in college as well. “Among the people the students trust the most are their parents. We want the parents to be fully informed to help them make an educated decision that this would be something right for the student.”
That level of partnership extends to the community as well. When Southwestern Advantage began marketing through social media, the company initially met resistance as people took to the platform to complain about college students. Now, students establish Facebook business pages, posting photographs of customers and their children with the company products and encouraging customers to share and tag them for greater exposure. Students also are encouraged to obtain permits from local law enforcement before the start of their sales program and to ask the police departments to post information about the program on their own websites.
That approach has had a dramatic impact on receptivity, sales and how college students feel about what they’re doing, says Moore. “We work with great young people who were out there doing their best, but there were some misperceptions creating this inaccurate flood of information on social media,” he says.
4. Don’t Re-invent the Wheel
CUTCO knives have been manufactured in the U.S. since 1949, and, while there have been technological changes, CUTCO’s training program looks very much like it did 30 years ago, says Long. The product is marketed primarily on an in-home basis by sales representatives, mostly college students, working for Vector Marketing. CUTCO also sells kitchen gadgets and hunting and fishing accessories, some from retail locations.
|CUTCO reps have fun during a Fourth of July Team Night in San Jose, California.|
Sales representatives request customer referrals at the end of the presentation and receive a base pay regardless of sales made. They start out making 10 percent commission on the first $1,000 of product sold, with graduated increases tied to sales.
Long notes that Vector Marketing recruits college students year-round. She finds them to be a demographic that does well at direct selling and is readily available to work in the summer time. But while college students seek work more during the summer than throughout the rest of the year, the job’s flexibility is a big draw and can work well for them during the school year too, she says.
“They can potentially get started with us during the summer and get the higher levels of commission by the end of the summer,” she adds.
Vector Marketing recruits primarily through direct mail invitations to high school graduates and college students and referrals from other student sales representatives. Other recruiting methods include on-campus visits, email blasts and community-based posters.
Following an interview, students attend a two- or three-day training in a local office, which involves role playing to help build confidence. During training, representatives learn about knives and competitors’ products. Although the company generates leads in the beginning, representatives learn to create a customer list, identify target customers and qualify leads. Students phone people with whom they are familiar, typically a parent or family friend, to set up initial appointments. All customer meetings are based on pre-set in-home appointments.
“As a direct selling representative, especially a college student, this is work they have probably never done before; we’re asking them to step outside of their comfort zone,” says Long. “As their confidence improves, they expand their circle out to people they don’t really know.”
Technology has become increasingly incorporated into Vector Marketing’s sales approach. Paper orders are filled out with the customer, but the representative can also enter customer order information into a computer. The order is sent straight to the factory for immediate processing. A Rep Online Order enables representatives to instantly flag billing challenges.
Vector Marketing’s AEVA or All Encompassing Vector App enables representatives to load training information and to check on appointments, arrival times and sales statistics. The app allows the manager to communicate with the entire team and the team members to communicate with each other.
Also at Southwestern students have online resources to help them in product and sales knowledge. They use Skype and video conferencing to communicate with sales managers, manage their accounts on a proprietary website, and use tablet-based sales processing systems in which customers sign off on transactions through a touchscreen.
Customers even benefit from technological advances: The educational products are offered in print and digital formats; the latter is refreshed for customers who buy a subscription.
While technology continues to change, the fundamentals also remain the same at Southwestern Advantage. Training includes product knowledge and presentation, prospecting, ethics, safety skills, self-discipline, time management, goal setting, running a business, teamwork, and customer service among others. Sales managers speak with students individually about how the skills will benefit them in their academics or in selling a brand and commodity in a workplace, Campbell says. “The marketing strategy is to have a personal relationship with people. That’s what direct selling is,” he says. “We build relationships, and through those relationships they decide what we have to offer is something that would benefit them.”
The success of these two companies is built upon values that do not change with the passing of time: hard work, commitment and ambition. By tapping into the natural enthusiasm of students, companies who focus on this population, such as Vemma with their Young People’s Revolution (YPR) and Isagenix with their START program, are joining Southwestern and CUTCO in gaining success and empowering young people with life skills.