E-commerce giants and the gig economy are fierce opponents, but direct selling’s unique marketing strategy could be its best chance to weather the competition.
Meaningful human interaction can seem like a dying art in this digital age. Front porches have been replaced by neighborhood Facebook groups, teachers assign homework by email, and political candidates rely on prepared text and voice messages to spread the word about their platforms.
So, it’s no surprise that business has followed the trend. Every transaction, whether shopping online or checking out in a brick and mortar store, usually begins with asking for a phone number, a loyalty card or an email address. Traditional retail is now taking notes from direct selling’s playbook, realizing that a digital connection after the initial sale will bring them back again and again. And it works. But something is getting lost in all of that automation. It’s a missing link that accounts for the number one source of revenue in the industry, and direct selling wields it better than just about anyone else.
The Power of Personalization
Face-to-face meetings still trump digital. Paris-based global market research firm Ipsos conducted a study of the direct selling workforce in the European Union and discovered that these types of personal interactions are the source of more revenue than any other type of communication. Customers like knowing who they’re buying from, even if it’s a new acquaintance.
“In the direct sales industry, that’s how we stand out,” says Kalaia Chief Executive Officer and Founder Gaya Samarasingha. “That’s what we’re all about. We cut out the middle man and just talk to the customer and provide them with a more custom solution.”
When it comes to receiving advertisements through emails or text blasts, customers know they are just one of thousands. Even the slickest TV commercials must cast a wide enough net to meet the needs of a large number of people, and customers are savvy enough to recognize that their individual wants aren’t the top priority when these mass-marketed solutions are thrust at them.
“Whether you start with a relationship and then connect online or the other way around, it has to turn into a conversation.”
— Gaya Samarasingha, Kalaia Chief Executive Officer and Founder
Face-to-face marketing rests in this gap, between marketing to the masses and understanding the individual customer. It’s an underserved category in traditional marketing that won’t fit into a mold that depends on celebrity endorsements and generalizations. Within this combination of transactions and interpersonal communication is where the true power of direct selling lies and what differentiates it from all the other retailers and e-commerce businesses out there. The result is not only a tailored, personalized solution, but one that comes from a trusted source.
Is Customization Worth the Cost?
One-to-one marketing is effective, sure, but it’s also expensive. Direct selling’s bread and butter is its consultants. They’re the ones telling a product or company’s story, providing the marketing and public relations that would traditionally come through other channels. While the cost of building a successful team and paying them well through lucrative compensation plans and bonuses is more expensive in the short term than retail’s quicker, leaner marketing routes—like emails with discount codes, for instance—it’s the repeat business and loyal customers that create ongoing, growing revenue for direct selling. The value, Samarasingha says, is in the long game.
“It’s a good investment that is going to pay you off in retention of that customer,” she says. “You might get that first sale out of somebody much easier if it’s an impulse buy, but retention is critical. It costs so much money to bring in a customer, but to continue to get that impulse buy, having some level of relationship with the brand or the person is going to play a part. Otherwise, they will move on to the next discount or product that comes along the way.”
Connection Requires Conversation
We crave connection. In a 2018 SurveyMonkey study of more than 1,800 Americans, 42 percent of adults say they favor in-person communication over any other interaction. That preference spans generations, as the study revealed face-to-face communication was preferred by 44 percent of adults ages 18 to 34, 40 percent of those ages 35 to 64, and 45 percent of the 65 plus crowd.
Even though texting and online conversations still carry weight, with 28 percent of adults under 34 leaning heavily on texting to communicate, the numbers reflect that personal interactions matter more to consumers. With direct selling, those interactions often convert to sales, meaning time spent one on one is time well spent.
But just because face time took the number one spot for revenue generation doesn’t mean it works in isolation. Digital connections may not be the source for the most sales within the direct selling channel, but they are still relevant.
“You have to be both, and I think it goes hand in hand,” Samarasingha says. “Whether you start with a relationship and then connect online or the other way around, it has to turn into a conversation.”
The challenge for any marketer on social media is that because of its digital nature, it can easily become a voyeuristic mechanism, where retailers and sellers watch customers rather than engage with them. The key, she says, is creating and committing to the interaction.
“We have to turn that lead generated through social media into some sort of a conversation where we can really understand what the customer’s needs are, then offer a solution and show them how we can help,” she says.
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Surviving the Competition
A lot has been said about the voracity with which e-retailers like Amazon and gig economy companies like Airbnb are scooping up customers and market share. In fact, Direct Selling News reported in November about the threat that these models represent for the direct selling industry. But it’s also fair to point out that the retail space has taken cues from the direct selling industry in the way it is seeking to create a relationship with consumers.
The game is changing, however, and even though retailers are now tapping heartily into the trend of connection and personalization, the competitive edge has shifted to include more than just customized solutions. Consumers now want to be immersed in the buying experience, to have an Instagram-worthy moment or a story worth telling later, and e-tailers and traditional retail brands are earnestly seeking to create these occasions through mobile app games, lottery-style discount codes, virtual reality adventures and wacky store displays. Direct selling’s unique conversational advantage could be its greatest resource for weathering the competition, but as customers continue to flock toward not just great products, but great experiences, leveraging the unusual or the disrupting to attract new customer and media engagements will become increasingly important to remain relevant.
Why Direct Sellers Need A Following in Order to Lead
Skepticism kills sales but relating to others by sharing your own experience can be a powerful antidote.
“That’s why storytelling is important,” Samarasingha says. “It makes someone say, ‘If she can do it, so can I.’ You connect with that person on an emotional level, rather than just science and factual information.”
But as connections multiply, face-to-face interaction with every customer isn’t always feasible, which is why building a following on social media plays an important role for direct sellers. Starting or continuing the conversation by engaging people through a story they can relate to and adding value to their lives, rather than simply broadcasting your own show, is the definitive difference that makes a direct seller’s online presence noticeable in a sea of marketing campaigns.
“Going live or making a post on social media is a good way to consistently communicate with a potential customer base without picking up the phone every single time you want to share something,” she says. “That’s not practical.”
